Cape Town - The rot within Eskom was laid bare when the Special Investigating Unit (SIU) presented its report to the Standing Committee on Public Accounts (SCOPA) on Tuesday, detailing unlawful and irregular contracts awarded in key sectors and how the power utility’s employees apparently colluded with suppliers on a mammoth scale.
In some instances Eskom officials approached complete strangers to set up subcontractors and bank accounts through which to channel funds to officials, according to the SIU.
“These links can only be identified from a review of bank accounts, email communications, cell phone records etc.
What further complicates the identification of conflicts is that Eskom vendors often pay kickbacks to officials indirectly e.g. by paying the creditors of the official directly (e.g. by paying the official’s child’s school fees or by paying the official’s service providers/suppliers directly).
“Including providing Eskom officials with credit cards held in the name of the service provider. This allows the Eskom employee to utilise funds held in the bank accounts of the Eskom service providers with very little chance of being exposed.”
The SIU conducted a deep dive into the ailing power utility, looking into the procurement and transportation of coal and diesel, procurement of cloud computing services and software.
Payments to consultants; maladministration in the affairs of Eskom and the non performance by service providers in relation to the Medupi, Kusile and Ingula Power Stations were also probed, along with employees doing business with Eskom.
There were 334 employees found to be potentially linked to entities that were Eskom vendors and at least 5464 employees failed to submit declaration forms.
Of the 135 conflict of interest cases referred for disciplinary action, 120 were finalised, with 71 employees found guilty, 18 not guilty, 19 resigning, four retiring, some cases being withdrawn and others outstanding.
Fourteen cases have been referred to the NPA.
In terms of coal supply agreements, the SIU has made 15 NPA referrals against various individuals and companies including two Eskom employees.
In one instance of a multimillion rand coal transportation contract, the report stated: “The SIU investigated the Coal Transportation Contract awarded to Commodity Logistix Managers (CLM) to the value of R24.8m.
The investigation found that an Eskom senior manager (for) Coal Operations and an Eskom Contract Supply Unit manager were receiving funds from CLM.
The SIU embarked on two separate civil litigation proceedings to freeze the bank accounts of the Eskom employees and disgorge the secret profits that they received in the form of kickbacks.
“The SIU has obtained an order from the Special Tribunal for the preservation of R11m in the bank account of (coal operations manager).
“The judgement (was) taken on appeal. The appeal has been dismissed in the High Court and the SIU will execute/enforce the Special Tribunal judgement.”
The Coal Operations manager was dismissed and the Contract Supply Unit manager resigned after being interviewed by the SIU and before a disciplinary referral was made.
SIU boss advocate Andy Mothibi said: “If we look at the civil litigation process, the amounts of irregular contracts count up to more than R13 billion.
“The legal team... are under instruction that we go back and identify all of those that have been implicated to date, we need to see action... As part of consequence management, all those assets they amassed illegally we must ensure we freeze them and recover.”
The SIU has recommended stringent measures including routine voice stress analyses and lie detector tests for employees as part of stopping the malfeasance.
“Thorough vetting of officials upon entering Eskom is not enough, Eskom should consider implementing contractual terms that allow for access to the personal information of the employee, such as bank accounts (and his/her spouse & children), e-mails and cellular phone communications. (Also) allow for voice stress analyses and lie detector tests,” the report states.
However it emerged that outgoing Eskom chief executive Andre de Ruyter had refused a request to be vetted.
“Z204 (vetting documents) is quite an onerous document, requiring a substantial amount of information. I was in the process of collating that information when the decision to resign was made therefore (the request) became moot,” he said.
SCOPA chairperson, Mkhuleko Hlengwa said that the situation was urgent and required redoubled efforts. He also noted that some of the investigations would require a sitting with President Cyril Ramaphosa.
Cape Times