Head of SIU Advocate Andy Mothibi in Parliament in 2023 where Eskom’s board and senior management appeared before Parliament’s Standing Committee on Public Accounts (Scopa). Picture: Phando Jikelo/Independent Newspapers
THE Special Investigations Unit (SIU) has launched a robust investigation into corruption at Eskom, revealing alarming schemes involving employees manipulating procurement processes to siphon off more than R1 billion.
This investigative effort, sweeping in scope and intricate in detail, is a significant move towards addressing the rampant corruption plaguing South Africa's power utility.
SIU head Advocate Andy Mothibi addressed the Standing Committee on Public Accounts (Scopa), highlighting the need for heightened scrutiny and transparency in Eskom’s operations.
His remarks almost echo the office of the Auditor-General, which told the same committee on Tuesday that inefficiencies in Eskom’s governance - particularly with fruitless and wasteful expenditure, criminal conduct and lack of consequence management - has been adding to the primary energy cost and consequently the tariff to the consumer.
In his address, Mothibi detailed urgent strategies the SIU was employing, including imaging over 500 laptops of identified employees as part of a comprehensive effort to ensure accountability. He noted that while thorough vetting of officials at Eskom upon hiring was crucial, it was not sufficient.
“SARS is already very advanced in investigating the tax affairs of the vendors, other entities, and Eskom employees concerned while the SIU has already engaged with Eskom to image the laptops of all identified individuals. To date, over 530 laptops have been imaged,” Mothibi said.
The investigations span nearly two decades for the period between 1 January 2003 to 2 December 2022, focusing on maladministered projects, including the Medupi, Kusile, and Ingula build projects, with estimated losses amounting to a staggering R200 billion.
According to the SIU, taxation matters are already under scrutiny by SARS, which is well positioned to address the tax affairs of vendors and Eskom employees involved in these questionable activities.
Mothibi also disclosed that the investigation has uncovered a scheme directing funds into smaller contract categories to evade stringent oversight, with transactions reportedly processed during off-hours, further indicating the deliberate nature of the malfeasance.
Alarmingly, 334 Eskom employees were found with financial ties to vendors, and a staggering 5 464 individuals failed to declare any conflicts of interest.
“Some of them were done after hours – not because they were committed to ensuring the work was done but as part of the modus operandi,” Mothibi said.
The SIU’s findings identified three distinct groupings of companies engaged in dubious practices using the Request for Quotation (RFQ) process to defraud Eskom. These groups consist of 23 vendors valued at R1.8bn, 31 vendors valued at R1.7bn, and 12 vendors whose purchase orders are approximated at R700 million, all across 15 power stations.
Significantly, the investigation has linked senior Eskom employees to state capture operations and concluded a contentious sale agreement with Tegeta, concerning coal supply to the Majuba Power Station valued at R3.7 billion.
The SIU's purview extends beyond procurement malpractices to cover mismanaged cloud computing and software licensing contracts for R1.2bn with SAP, which the Special Tribunal dismissed.
Another concern raised included breaches in emergency security contracts, where protocols were not adequately followed, enabling contracts to be awarded without proper vetting, and where services were subcontracted with minimal capability to deliver.
“The SIU identified security contracts that were awarded on an emergency where Eskom employees were planned on declaring an emergency seven days in advance to companies that were appointed but did not have the capacity to undertake the work and render the service and subcontracted 90% of the work to third parties,” Mothibi.
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