Eskom is attempting to recoup tens of billions of rand that it believes was paid irregularly to contractors, including coal supply agreements and construction contracts, underscoring the deep rot plaguing the state-owned utility.
The extent of the embattled state-owned utility’s troubles are contained in a written reply by President Cyril Ramaphosa to a question by National Council of Provinces MP Cathlene Labuschagne of the DA.
Ramaphosa said Eskom had cancelled coal supply agreements and construction contracts valued at R11bn and is involved in litigation to have a further R3.7bn worth of coal supply deals declared invalid.
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The utility is seeking to prevent further losses of about R10bn by setting aside other coal supply agreements and construction contracts, he said.
The extent of fraud and corruption at Eskom first emerged in the Zondo commission of inquiry report into state capture and from the revelations of former Eskom group CEO André de Ruyter, who estimated that Eskom was losing more than R1bn a month due to criminal activity. De Ruyter alleged crime syndicates were robbing power stations, which he said contributed to their poor performance and to load-shedding.
Ramaphosa said Eskom is defending total claims of about R7.2bn by contractors and pursuing R4.8bn worth of claims against suppliers and the utility’s former directors. “Eskom [is] recovering approximately R2bn unlawfully paid by Eskom to service providers,” he wrote.
The Special Investigating Unit (SIU) investigations and Eskom disciplinary action are under way regarding 14 coal transportation service providers and there are internal investigations into four diesel suppliers, he said.
The SIU has referred 5,635 matters to Eskom for disciplinary proceedings against employees for their alleged failure to submit financial declarations or declare or get approval for doing work outside the company. In addition, there are 125 pending criminal cases or referrals to the National Prosecuting Authority (NPA) by law enforcement and a further 65 referrals to the Asset Forfeiture Unit relating to the utility.
Ramaphosa said the department of public enterprises is finalising external advice on applications to have several former directors of Eskom declared delinquent.
At least 25 former senior executives have been included in a database of individuals dismissed for their involvement in state capture and corruption.
The department has, the president said, taken various measures regarding the implementation of the recommendations of the Zondo commission.
Ramaphosa said an operational task team, including the Hawks, the SIU and the NPA, is investigating claims of alleged sabotage, fraud, corruption and theft of Eskom infrastructure.
Proclamations have been issued authorising the SIU to investigate maladministration and corruption at Eskom covering the period January 1 2010 to December 31 2022.
The scope of these investigations includes any nonperformance or defective performance by Eskom’s suppliers; maladministration concerning power stations; and the procurement of goods, works and services concerning power stations.
At a media briefing, electricity minister Kgosientsho Ramokgopa said 2,147 criminal cases relating to Eskom had been opened since April 1 last year, 1,586 of which are under investigation. “This is gradual but meaningful progress,” he said.
“We are looking at the configuration of the anatomy of a criminal operation by looking at the sources,” Ramokgopa said. He estimated the value of physical recoveries of stolen property at “just shy of R94m”.
“We’ve been checking on second-hand dealers and will elaborate on that later. At this stage we have carried out 15,043 compliance inspections, and we are cutting the arteries of syndicates,” he said.
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