In 2020 Eskom paid almost R1m for an oil storage container that, three separate quotes obtained by investigators showed, could have been procured for about R80,000.
It paid R940,000 for the container, which ended up being used to store old tyres.
In another transaction, a company was paid R600,000 to fix 12 grass trimmers. From quotations obtained by an investigative team, Eskom could have, at the time, bought 12 brand-new grass trimmers for about R114,000. Furthermore, not all the grass trimmers were returned to Eskom, and of those that were returned, only seven were in working order after the repair work.
These details were contained in a confidential 2022 report on a forensic investigation into alleged procurement irregularities at the Tutuka power station coal stockyard, which has been seen by Business Day.
During a presentation to the standing committee on public accounts at the end of January, André de Ruyter, who left his role as CEO last week, identified Tutuka as one of the six worst-performing power stations in Eskom’s fleet.
The six power stations were contributing to the need for high stages of load-shedding.
At the time Tutuka, near Standerton in Mpumalanga, was running at an electricity availability factor (EAF) — a measure of power generated against total installed capacity — of about 17% despite being one of the newest stations in Eskom’s coal fleet.
The power station was commissioned between 1985 and 1990. It has six units with a combined installed capacity of about 3,600MW. This means that at an EAF of 17%, Tutuka is generating only 600MW of power.
De Ruyter told the committee how criminality at Tutuka is linked to broader issues in Mpumalanga where much of the crime and corruption that also affect power stations is being driven by crime cartels acting in the area. The criminality, he said, is “well-organised and deeply embedded”.
The GM at Tutuka, Sello Mametja, has to wear a bulletproof vest when he walks through the plant and he and his family require the protection of bodyguards, De Ruyter told the standing committee on public accounts.
According to the report into alleged procurement irregularities at the Tutuka coal stockyard, investigations were conducted after whistle-blowers reported possible fraudulent transactions in which Eskom paid for services not rendered, or inflated prices. In one of these transactions, the oil storage container that was delivered, which looked like a regular shipping container, did not fit the description of the oil storage facility that was required. Investigators noted that the storage container looked second-hand and was being used to store old tyres.
In addition, the report said, two companies had responded to the request for quotation, but both responses came from the same email address.
At the time of the investigation, the company director who had submitted the bid had resigned from the company.
The Eskom employee who acted as the buyer for the oil storage facility was on suspension at the time that the investigation took place and could not assist with the investigation, the report said. The report said the employee who sourced the request for quotation for the oil storage facility was employed at Kusile, not at Tutuka.
The report mentioned no recommended actions to flow from the investigation because, it said, station manager Mametja confirmed in June 2022 that the matter could be closed as it had been fully investigated by another organisation whose services had been procured at the level of the power station. According to Eskom, as a result of these investigations three of its employees were suspended.
One of them has since died while the other two were arrested and later released on bail, Eskom told Business Day. They are now undergoing internal disciplinary hearings, which Eskom said are due to happen this week.
The companies that were named in the forensic investigation are still listed as suppliers to the utility, but they have been subjected to a supplier review process to have them barred from doing business with Eskom in future.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.