Eskom corruption – Collusion between management and coal suppliers

The Special Investigating Unit (SIU) said there is clear collusion between Eskom management and coal suppliers, with many contracts entered into by executives under investigation. 

SIU spokesperson Kaizer Kganyago told Newzroom Afrika that their investigations are expanding further to include coal supply contracts and increasing diesel supply contracts. 

“Eskom investigations are huge, extending beyond employees to coal contracts and will get even bigger,” Kganyago said. 

The SIU is currently focusing on coal contracts between Eskom and suppliers where sabotage occurs. It includes substandard coal breaking the utility’s machinery and the deliberate destruction of infrastructure, such as conveyor belts. 

Individuals commit sabotage to initiate contracts for repairs as well as the transport of coal using trucks.

The SIU has successfully investigated coal supply contracts, with Eskom having cancelled coal-supply agreements and construction contracts valued at R11 billion yesterday. 

Litigation by Eskom has also had coal-supply agreements worth R3.7 billion declared invalid, and other coal and construction deals worth R10 billion have been set aside following SIU investigations. 

Kganyago said the SIU is looking into the building of power stations, with private-sector companies under investigation for supplying inadequate equipment and maintenance.

Chairman of Parliament’s Committee on Mineral Resources and Energy, Sahlulele Luzipo, said that the blame must be placed squarely at the feet of Eskom’s management. 

“Executive enters into contracts. In this context, the committee is vindicated in saying that the crisis at Eskom is due to a well-planned strategy to ensure the utility does not perform optimally,” he said.

If Eskom had better management, it would not be possible for people to sabotage power stations and enter into illegal tenders. 

Kganyago responded, “There is clear collusion between management and people that are entering into contracts with suppliers.”

“However, we do not investigate individuals, we look at processes. If those processes lead us to you, then you will be investigated,” he said.

The SIU is extending its investigations to include Eskom’s diesel supply as the fuel is being purchased in substantial amounts to mitigate load-shedding during winter. 

Kganyago said some diesel contracts are linked to coal suppliers as there is greater benefit for them to supply Eskom with diesel rather than coal at this point. 

This is due to the decrease in coal prices and the massive increase in the amount of diesel being used by Eskom.