24/01/2018 09:06 SAST | Updated 24/01/2018 09:06 SAST

Is New Eskom Boss The Right Man To Fill Its R355-Billion Hole? Absolutely, Says SARB Governor Lesetja Kganyago.

Phakamani Hadebe knows Eskom inside and out.

Phakamani Hadebe.
City Press
Phakamani Hadebe.

Eskom's interim CEO Phakamani Hadebe is a man with the toughest job in town: he must quickly find ways to fill a glaring R355-billion hole in Eskom's balance sheet.

BusinessLive columnist Stuart Theobold this week wrote that Eskom's debt guaranteed by the government is R254-billion, the same as the public sector borrowing requirement.

This is huge. And the bond markets have lost confidence in the electricity utility so raising further debt is going to very tough. Yet, when SA Reserve Bank governor Lesetja Kganyago spoke to Hadebe after his appointment was announced at the weekend, he was upbeat and excited about his new role.

"Phakamani is a public servant -- he is one to serve South African people," said Kganyago, who first worked with Hadebe in the brand new Treasury in 1996.

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Lesetja Kganyago, governor of the SA Reserve Bank.

They were part of the first generation of young ANC activists who were trained around the world to learn to run a fiscus for a democratic era.

The Treasury is widely regarded as South Africa's most successful institution and a bulwark of the country.

As part of that generation of young people, he was sent to work at the International Monetary Fund in Washington, D.C., in 1997. On his return, he joined Kganyago in the department dealing with the liability management of domestic debt.

It was here that he became the asset and liability management guru he is known as; those who know him say he can work his way around a set of accounts like Lewis Hamilton around an F1 racetrack.

"With that responsibility, he had to sit on the fiscal risks committee with regard to state-owned enterprises," says Kganyago. Later, Hadebe developed an even deeper knowledge of state-owned companies when he became the deputy director-general of asset and liability management. "He had full oversight of the state-owned enterprises and the government borrowing programme."

This knowledge is going to be invaluable as Hadebe begins to pare down Eskom's debt to take the pressure off the government's balance sheet. Eskom is an albatross and Hadebe will have to turn it into an eagle. "He understands bond markets, both domestic and international, like no other," said Kganyago in an interview with HuffPost SA.

Waldo Swiegers/Bloomberg via Getty Images
A metal sculpture stands outside the headquarters for Eskom Holdings SOC Ltd.

Kganyago says Hadebe's appointment follows a pattern where Treasury executives who have a bird's eye view of parastatal finances are dispatched to fix them. Former Treasury director-general Maria Ramos was sent to Transnet when it was in a parlous state while another official, Tryphosa Ramano, was sent to SAA to attempt to fix the national airline.

When the Land Bank was a mess, Hadebe became its CEO and served, by all accounts, with distinction. He quit that job to accept a role as chief executive of the corporate and investment banking unit at Barclays Africa/Absa but left three years later when it is believed he was overlooked for a more senior role. A number of black executives protested when he left.

Those who know Hadebe say he can work his way around a set of accounts like Lewis Hamilton around an F1 racetrack.

Hadebe is a technocrat and a policy wonk -- both are characteristics that will serve him well as he undertakes South Africa's toughest corporate role. He is less skilled at confrontation, says an official who worked with him at the Treasury, and there is likely to be lots of confrontation at Eskom as he tries to unwind an empire of corruption.

Business Report last week revealed that the specialised commercial crimes court in Pretoria has convicted former Land Bank CEO Philemon Radichaba Mohlahlane and three others of defrauding the bank of at least R6-million in a case dating back to 2012.

Kganyago says this is Hadebe's work and that he is likely to take the same approach to dealing with corruption at Eskom.

Given how big Eskom's workforce is, how good a people manager is Hadebe? "He's not just a good people's manager, he's a good human being," said Kganyago.