10 December 2021
Finding: Complaint 9322
Date of publication: 25 October 2021
Headline: Matshela Koko's alleged cooking of Eskom's books: 5 things you need to know
Author/compiler: James de Villiers
Particulars
This finding is based on a written complaint by former Eskom CEO Mr Matshela Koko and a one-page extract from the Eskom Integrated Report of 31 March 2021; a written reply by News24 Public Editor Dr George Claassen, News24 Assistant Editor (In-depth news) Mr Pieter du Toit and News24 senior investigative journalist and data analyst Mr Kyle Cowan; and a written response to News24’s reply by Mr Koko.
Complaint
Koko submits that the article transgressed the following clauses in Section 1 of the Press Code:
“The media shall:
1.1. take care to report news truthfully, accurately and fairly;
1.3. present only what may reasonably be true as fact; opinions, allegations, rumours or suppositions shall be presented clearly as such;
1.7. verify the accuracy of doubtful information, if practicable; if not, this shall be stated; …”
1. Summary of text
1.1. The article noted that Koko was appointed Eskom group executive for technology in 2014, and became group chief executive for generation and technology in early 2016 before being appointed acting group chief executive in December 2016. He resigned in 2018.
1.1.1. According to the article, a News24 investigation revealed that a turnaround in Eskom’s performance under Koko potentially came “at the expense of reliable electricity generation today”.
1.1.2. Koko dismissed the allegation as preposterous, and described it as “an attempt to undermine the best operational improvements of 2016, 2017 and 2018 under my leadership”.
1.2. The News24 investigation reportedly revealed manipulation which centred around the Energy Availability Factor (EAF), a metric which Eskom uses to indicate the overall performance of electricity generation. It is “a percentage measure of Eskom’s available generation capacity compared to its overall installed generation capacity over a given time period”.
1.2.1. The EAF rose in the 2016/17 financial year from just under 70% to 77%, remained close to 77% in 2017/18 and then dropped back to 70% in 2018/19.
1.3. The article went on to list five points which emerged from the News24 investigation.
1.3.1. Firstly, it stated that a leading cause of the apparent manipulation and subsequent drop in Eskom’s performance after Koko’s departure was a disciplinary card system that he introduced in February 2016 as group executive for generation.
1.3.2. In terms of this system, power station managers were paid generous bonuses for meeting performance targets, and faced periods of suspension without pay when they failed to meet targets.
1.3.3. According to Eskom insiders, the disciplinary card system may have been an incentive for the widespread under-reporting of faults.
1.4. Secondly, News24 reported that it found that an increase in planned maintenance in 2015 was not sustained during Koko’s tenure and that, in addition to running power generation units hard, this led to “a sharper than expected increase in unplanned breakdowns after his departure”.
1.5. Thirdly, News24 said its investigation showed that “the events and practices” between 2015 and early 2018 may be among the causes behind Eskom’s record number of unplanned breakdowns during the last three years.
1.6. Fourthly, the article quoted Eskom as stating that it “believed” that the system was less constrained during Koko’s term because of an increase in maintenance in 2015 (before the start of his term) and due to the introduction of new capacity from the power stations Medupi and Kusile as well as additional capacity from independent power producers.
1.7. Fifthly, according to News24, there was a dramatic increase in units placed in cold reserve during Koko’s tenure, which were brought back online almost immediately after his departure. This reportedly suggests that broken units were put in cold reserve “to avoid it being reported as unplanned breakdowns”.
Matshela Koko
2.1. Koko complained in particular about the following statement in the article: “News24 found that an increase in planned maintenance in 2015 was not sustained during Koko’s tenure, which, in addition to damaging practices of running power generation units hard, led to a sharper than expected increase in unplanned breakdowns after his departure.”
2.2. He submitted that the measure of planned maintenance at Eskom is the planned capability loss factor (PCLF), which is published annually in Eskom’s financial statements.
2.3. In support of his submission, he attached page 130 of the Eskom Integrated Report of 31 March 2021.
2.4. Koko took issue with News24’s statement that it found that an increase in planned maintenance in 2015 was not sustained during his tenure, and argued that this claim was not supported by the audited facts in the Eskom Integrated Report of 31 March 2021.
2.5. He stated that, during his tenure, the PCLF was 9.91% in 2015, 12.99% in 2016, 12.14% in 2017 and 10.35% in 2019 (this is presumably a typographical error for 2018).
2.6. Based on these figures, he argued that the planned maintenance was “sustained above what was achieved in 2015”. Accordingly, he submitted that the News24 article was not factual, not truthful, not accurate and not fair.
2.7. Koko also specifically took issue with the following reference in the article: “… in addition to damaging practices of running power generation units hard …”
2.8. He argued that this statement was not accurate and that News24 does not have evidence to support it.
2.9. Accordingly, Koko demanded a retraction and an apology.
News24
2.10. News24 denies that any of the reporting in the article constituted a breach of the Press Code.
2.11. Firstly, it reiterated its contention that the increase in planned maintenance in 2015 was not sustained during Koko’s tenure.
2.11.1. It noted that News24’s own analysis of Eskom performance data was largely in accord with Eskom’s official figures.
2.11.2. The publication provided the planned maintenance figures for the following financial years: 13.10% for 2015/2016; 12.04% for 2016/2017; 10.48% in 2017/2018; and 10.10% in 2018/2019.
2.11.3. Based on these figures, it submitted that it was clear that the levels of planned maintenance were not sustained during Koko’s tenure. It argued that, after an initial increase, there was a decline in the levels of planned maintenance.
2.11.4. In addition, News24 stated that it could show that the 3% increase in 2015/2016 (from 9.91% in 2014/2015) was related “to lengthy outages at just five of the more than 80 units within [the] Eskom generation fleet”.
2.11.5. Accordingly, the publication called for Koko’s complaint to be dismissed.
2.12. Secondly, News24 addressed Koko’s complaint about the reference in the article to damaging practices and running the power generation units hard.
2.12.1. It pointed out that this statement was based on the annual Energy Utilisation Factor (EUF) for the units at coal-fired power stations owned and operated by Eskom.
2.12.2. The publication provided EUF figures for the following financial years: 92.70% for 2015/2016; 83.26% for 2016/2017; 81.05% in 2017/2018; and 90.24% in 2018/2019.
2.12.3. It stated that the EUF for these years was higher than 80% during Koko’s tenure in 2016/2017 and 2017/2018. While it acknowledged that this was a reduction over previous and subsequent years, it asserted that the units were still being run very hard.
2.12.4. The publication provided comments from an Eskom official and an Eskom response to News24 questions in support of its contention that the utility’s power generation units were run “hard” during Koko’s tenure.
2.12.5. In addition, News24 cited information from Eskom’s 2016/2017 and 2017/2018 integrated annual reports as evidence that the units were run hard.
2.12.6. It therefore requested that Koko’s complaint regarding the accuracy of the article be dismissed.
2.13. With regard to the issue of fairness, News24 submitted that it published Koko’s responses in full to numerous questions and allegations, and provided a website link to substantiate this:
2.13.1. Over and above this, News24 stated that Koko also published his own responses on Twitter. As a result, it submitted, his version of events was readily available to the public.
Further arguments
2.14. In reply to News24’s submission, Koko stated that there was no evidence to support the publication’s allegation that planned maintenance was not sustained during his tenure.
2.14.1. He maintained that there was only “one version of the truth when it comes to Eskom reliability data” – and that this was to be found in the Eskom Integrated Report, which was audited by independent external auditors.
2.14.2. He dismissed News24’s own data on Eskom as irrelevant.
2.15. Koko again outlined the PCLF data contained in his original complaint.
2.15.1. He added that these PCLF figures would not make sense to a trained power plant engineer unless they were compared with the Eskom reliability objective, which is set out as follows in the Integrated Report for the year ended 31 March 2013: “The Eskom board has recently approved a five-year plan for generation sustainability. The policy follows an 80:10:10 principle: on average, the generating fleet should have an energy availability factor (EAF) of 80%, leaving 10% for planned maintenance outages and 10% for unplanned outages.”
2.15.2. In terms of this principle, according to Koko, Eskom must maintain a PCLF of at least 10%. He submitted that Eskom sustained a PCLF of higher than the targeted 10% during his tenure.
2.15.3. Koko added that his tenure as Eskom group executive for the technology division responsible for maintenance started in the 2015 financial year, and not in the 2016 financial year.
2.15.4. He stated that the PCLF was 9.9% in the 2015 financial year, which was below the target of 10%.
2.15.5. He also submitted that the PCLF subsequently exceeded the target of 10% – “for the first time in the documented history of Eskom” – during his tenure.
2.15.6. He said that he had not seen News24’s analysis “that can show that the 3% increase seen in 2015/2016 relates to lengthy outages at just five of the more than 80 units within Eskom generation fleet”, but argued that this was irrelevant.
2.16. Koko further stated that News24 put technical questions to him which were not logical or rational, and said he was shocked that it continued to advance what he regarded as “technically unsound arguments”.
2.16.1. He questioned whether News24 was qualified “to make the analysis that they claim they have done”.
2.16.2. Koko also stated that Eskom officially disagreed with News24’s findings, and informed the publication that internal rules and processes were followed – “[i]n other words, and in Eskom’s own version my team and I acted procedurally and within the law”.
2.17. In relation to the allegation regarding damaging practices, Koko referred to the EUF table provided by News24. He argued that the publication’s contention that he ran the plant hard was not supported by News24’s own data.
2.17.1. He stated that, when he was appointed in the 2015 financial year, the EUF was “the highest in Eskom recorded history at 93.03%”. According to him, this figure was dropping “[a]t all material times” during his tenure.
2.17.2. He further said that the average EUF between the 2010 financial year and the 2021 financial year was 89.03%, and that it was only during his tenure in the 2017 and 2018 financial years that the EUF was below this figure.
2.17.3. In any event, he added, there was nothing technically wrong in running an Eskom plant at a EUF of 80% and above because plant owners maintain a higher EUF to generate more income for their shareholders in a competitive market.
2.17.4. He also argued that it was “technically irrational and nonsensical” for News24 to suggest that a EUF of 80% was damaging to the plant in view of the fact that the designers of power plants define the maximum power output that a power station unit can produce while running continuously within safe limits and at conditions specified by the original manufacturer of the equipment.
2.18. In light of the above, Koko submitted that News24’s report was inaccurate, and repeated his demand for a retraction and an apology.
3.1. The complainant and the respondents raise complex issues of a highly technical nature related to various aspects of engineering. However, the office of the Press Ombud is not the appropriate forum to analyse or evaluate the merits of such matters.
3.1.1. Such a determination falls outside the ambit of the office of the Press Ombud. The domain of this office is limited to the Press Code and, more specifically, to whether or not member publications comply with the provisions of the Press Code.
3.1.2. Accordingly, my primary consideration in adjudicating this complaint is whether or not there were any breaches of the clauses of the Press Code cited by the complainant, namely clauses 1.1, 1.3 and 1.7.
3.2. The first aspect of Koko’s complaint concerns the statement in the News24 article that an increase in planned maintenance in 2015 was not sustained during his tenure.
3.2.1. Both Koko and News24 use PCLF data in support of their arguments. As they use the same measure of performance of planned maintenance, this provides a basis for comparison without entering into a discussion on any technical aspects of the PCLF.
3.2.2. Koko points out that the PCLF was “sustained above what was achieved in 2015”. This is indeed the case, based on both sets of figures provided by Koko and News24 (see points 2.5 and 2.11.2).
3.2.3. However, this is not the issue that is in dispute. What is in dispute is the veracity of News24’s statement in the article that “an increase in planned maintenance in 2015 was not sustained during Koko’s tenure” (my emphasis).
3.2.4. This claim is supported by the PCLF data provided by both parties: there is a continued decline after 2015 (even though, as Koko correctly submits, the PCLF was higher than what was achieved in the 2014/2015 financial year).
3.2.5. Accordingly, the article complies with the Press Code’s requirements to report news accurately and truthfully (clauses 1.1 and 1.3)
3.3. The second aspect of Koko’s complaint concerns the reference in the News24 article to “damaging practices of running power generation units hard”.
3.3.1. Both parties refer to the performance metric EUF to support their claims. As pointed out earlier, the office of the Press Council is not the appropriate forum to make a determination on matters of such a technical nature.
3.3.2. It is therefore not within the remit of the Press Ombud office to make pronouncements on whether a EUF above 80% amounts to running a unit hard (as argued by News24) or not (as argued by Koko).
3.3.3. What does fall within the domain of this office is to assess whether or not News24 made any effort to verify the accuracy of its statement, as required by the Press Code.
3.3.4. In News24’s response to the complaint, the publication provides evidence from two Eskom sources in support of its contention that the utility’s power generation units were run “hard” during Koko’s tenure (see point 2.12.4).
3.3.5. Whether or not those sources are correct is not for this office to decide. The point is that News24 did make efforts to establish the accuracy of the information in its article, in line with clause 1.7 of the Press Code.
3.4. Furthermore, Koko was given the right of reply in the article. His forthright rejection of the allegations was duly recorded (see point 1.1.2).
3.4.1. Accordingly, there is no merit in Koko’s complaint that the article lacks fairness and is in breach of clause 1.1 of the Press Code.
The complaint that the article is in breach of clause 1.1 is dismissed for the reasons identified in my “Analysis”, in particular points 3.2.2 to 3.2.4 as well as point 3.4.
The complaint that the article is in breach of clause 1.3 is dismissed for the reasons identified in my “Analysis”, in particular points 3.2.2 to 3.2.4.
The complaint that the article is in breach of clause 1.7 is dismissed for the reasons identified in my “Analysis”, in particular points 3.3.4 and 3.3.5.
The Complaints Procedures lay down that, within seven working days of receipt of this decision, either party may apply for leave to appeal to the Chairperson of the SA Press Appeals Panel, Judge Bernard Ngoepe, fully setting out the grounds of appeal. He can be contacted at Khanyim@ombudsman.org.za
Tyrone August
Deputy Press Ombudsman
December 10, 2021