Eskom acting CEO Calib Cassim said, aside from the utility’s performance, corruption and fraud give him “sleepless nights”.
Eskom released its results for the year through March 2023 today, which revealed a concerning financial position and deteriorating performance.
In the presentation of these results, Eskom highlighted stamping out fraud and corruption at the utility as one of its key focus areas.
Cassim said that to turn the organisation around successfully, it must deal proactively and effectively with “fraud, corruption and the criminal elements that have infected the organisation”.
“There must be zero tolerance for fraud and corruption, and the legacy of state capture must be dealt with to rebuild trust and confidence in Eskom.”
The utility lost R81 million to fraud and corruption in the 2023 financial year.
It also lost R344 million to theft of conductors, cabling and network-related equipment, malicious damage to property and attempted theft.
Estimated non-technical issues cost the utility R5.61 billion.
However, Cassim said fraud and corruption have not just affected Eskom financially, as its reputation has been in a “downward spiral”, accelerated by environmental challenges, load-shedding, the lack of cost-reflective tariffs, high levels of debt and escalating arrear municipal debt, allegations of fraud and corruption and the effects of state capture.
Former Eskom CEO Andre de Ruyter has also extensively documented the effects corruption and fraud have on the utility’s performance.
Earlier this year, De Ruyter exposed specific instances of intentional sabotage at Eskom in an affidavit as part of a legal battle with 19 applicants who aimed at declaring load-shedding unconstitutional.
In this statement, the former CEO said, “Eskom’s various power stations have experienced widespread sabotage, criminality, and destructive and unlawful industrial action”.
He acknowledges that, in some cases, damage to Eskom operations and property is not the result of sabotage.
However, in several cases, “it is clear that damage to Eskom property and operations has been deliberate”.
This sabotage resulted in significant damage, financial losses, and load-shedding, he said.
“In our bid towards a high-performance ethical culture, we simply must root out the ongoing scourge of fraud, crime and corruption, as well as poor performance and other unacceptable behaviour in general,” Cassim said in Eskom’s latest results.
He also said the utility prioritises the protection of employees who participate in the fight against corruption.
However, he acknowledged that Eskom has made little progress in its fight against corruption and fraud at the utility, as it has had to focus on its operational challenges and improving electricity supply.
“As the former Group CEO indicated last year, we must realise that it will take time for efforts to improve internal controls across the organisation,” he said, referring to De Ruyter.
“Our efforts are also somewhat fragmented, further hampering consequence management, although our plans to establish a single investigative unit to coordinate all investigative matters should go some way towards streamlining our efforts.”
He also expressed Eskom’s disappointment with the slow progress law enforcement agencies are making in dealing with matters involving fraud and corruption.
However, he said the utility has seen “some notable successes” recently.
“We are resolute in pursuing those who have enriched themselves at the expense of our organisation and South Africa,” he said.
“We are ensuring that we have a robust framework in place for zero tolerance to fraud and corruption, and we’re strengthening the support for whistle-blowers.”
“We continue to collaborate with law enforcement agencies to ensure that perpetrators are brought to account.”