The great power robbery: on the trail of looted Eskom billions
Hawks and SIU follow river of cash that flowed out of SA through elaborate schemes - and it doesn't always lead to the Guptas
The Hawks are working closely with the Special Investigating Unit (SIU) to probe tender irregularities within Eskom, following billions of rand that flowed offshore in “the great power robbery”.
“It’s clear it’s not just one family like the Guptas who have capitalised on this. Other individuals and businesses built on and perfected their models,” a government insider, with intimate knowledge of the Medupi and Kusile power plant saga and President Cyril Ramaphosa’s plan to stem Eskom’s collapse, told Times Select.
“Various monies from various contracts are being followed. They are looking at the billions [of rands] which flowed offshore through elaborate schemes behind the great power robbery.”
Hawks spokesperson Brigadier Hangwani Mulaudzi confirmed that investigations were under way.
“We are working very closely with the SIU. We are unable to divulge the nature of our investigations,” said Mulaudzi.
The SIU said it would comment later this week.
Confirmation of the investigations comes as energy experts and government insiders blame the power utility’s imminent collapse on corruption, faulty infrastructure design and construction, skills losses and poor maintenance.
Blackouts last week raised questions as to why the country’s mega power plants, Kusile and Medupi, which were meant to be the answer to SA’s ageing power infrastructure, are not complete.
Tender irregularities have dogged Kusile and Medupi, the construction of which was controversially awarded to Hitachi Africa.
In 2015, Hitachi Africa was fined $19m by the US Securities Exchange Commission for violating the foreign corrupt practices act over a $2m payment to the ANC’s investment arm, Chancellor House, in exchange for receiving the Medupi and Kusile build contracts.
The government insider, speaking on condition of anonymity, said the rush to build the plants was a fatal error.
“It led to the design and engineering mistakes. It led to questionable companies, with no experience, or whose experience was shown to be dodgy based on work at other power plants, to be appointed.
“Companies who were shown to have failed in their work were somehow reappointed. This entire thing was designed to flop from the beginning.”
He said the hollowing out of skilled employees made matters worse.
A technician, who worked for three years at Kusile and Medupi fixing previous contractors’ errors, described Kusile as the “ground zero of government wasting taxpayers’ money”.
“Everything gets done at least twice. You could go to Kusile and throw a rock and whichever contractor the rock hits there will be skulduggery.
“I have worked at places where it feels like you are trying to prevent problems. At Kusile and Medupi, all you are doing all day long is trying to put out fires. The three years I worked were repairing mistakes.”
According to Eskom documents, design flaws at Medupi and Kusile significantly affect most critical components including water-cooling systems, boilers, coal-crushing mills and toxic fume and dust removal systems.
The problems are compounded by the highly technical plants being unable to handle the low-grade coal that is burnt, which causes the power stations to trip.
‘Doomed from the beginning’
Hilton Trollip of UCT’s Energy Research Centre said the Medupi and Kusile projects were doomed from the beginning.
“Eskom is also simply ungovernable. It’s not one single problem but a series of systemic problems.”
He said the government had a nearly impossible task in turning the situation around.
Eskom spokesperson Andrew Etzinger said the utility’s resourcing strategy at Kusile and Medupi was based on the phasing-in of resources based on the construction completion of the units.
“The initial strategy was to augment the current skills base with the different original equipment manufacturer experts in order to ensure seamless transition from construction to operations.
“This has not been fully implemented due to financial constraints. We are satisfied that we are on the right path to progressively build competency and resource our entire fleet of generating plants.”
Asked about the investigation, Etzinger said Eskom was continually investigating reported incidents of maleficence and maladministration.
“A panel of external service providers and an internal investigative body is in place. Furthermore, a number of regulatory bodies with different scopes and mandates are equally conducting investigations and probing inquiries, and Eskom is co-operating. These institutions are SIU, national treasury procurement investigations, National Director of Public Prosecutions, Zondo commission, Standing Committee on Public Accounts, South African Police Services.”