Eskom corruption – steal things from one power plant and sell it to another

The Directorate for Priority Crimes Investigation (Hawks) revealed details about fraud where criminals stole equipment from one Eskom power station and sold it to another.

The Hawks Middelburg Serious Commercial Crime Investigation unit recently arrested three suspects for fraud and theft.

The accused are Dibuseng Business Enterprise, Mtau Dony Mmathinyane, and Maphoto Manape Sylvane Mokgadi.

The Hawks explained that the three accused colluded with a common purpose to defraud Eskom through a corrupt scheme.

In 2017, Arnot Power Station issued an order to DLC 56 project to purchase and deliver valves. It bought and delivered the valves to Arnot.

In early 2020, Arnot issued another order to purchase and deliver valves to the power station.

The above valves are only manufactured by Billfinger Intervalves per Eskom’s specifications.

Late in 2020, Tutuka Power Station issued an order to Dibuseng Business Enterprise to purchase and deliver valves.

Dibuseng Business Enterprise delivered valves to Tutuka, and a payment for R1.039 million was made.

However, the Tutuka site manager realised that the valves were not what they had ordered.

He contacted Dibuseng Business Enterprise to find out what happened with the supply of incorrect valves. 

The sole director, Mtau Dony, responded that he would come back to him to clarify but failed to do so.

Knowing that Billfinger is the only manufacturer of these valves, the manager contacted them to inquire why they sold the incorrect valves to Dibuseng Business Enterprise.

He discovered that Dibuseng Business Enterprise only did a quotation with them, and they never sold any valves to them.

Forensic investigators discovered that the valves delivered by Dibuseng Business Enterprise are the same ones delivered to Arnot by the DLC 56 project.

Arnot confirmed that those valves were stolen from them in 2020.

A Hawks investigation revealed that the delivery documents Dibuseng Business Enterprise submitted were the same documents issued by Billfinger to the two companies.

Dibuseng Business Enterprises fraudulently changed the name of those suppliers to its own business name.

The Hawks explained that Eskom recorded a loss of R1.039 million because it purchased the same valves twice.

This is not an isolated incident. Former Eskom CEO Andre de Ruyter said Eskom bought goods and services from tenderpreneurs at wildly inflated prices.

“I discovered bearings worth R110,000 being purchased for more than R400,000,” De Ruyter wrote in his book, Truth to Power.

“At one power station, we were billed R370,000 for a compressor refurbishing, which should have cost R40,000. A hydraulic oil pump costing R295,000 was bought for R650,000.”

Earlier this year, a former Eskom short-term contract employee stationed at Tutuka was arrested for fraud and corruption.

Zandile Rosemary Ngcobo, who was employed as a procurement officer, colluded with two Eskom employees and a supplier to purchase a shipping container at an inflated price of R939,550.

The container was delivered on-site. However, it did not meet the specifications and was only valued at R20,000. As a result, Eskom suffered a loss of R919,550.

In November 2021, two Eskom employees and a supplier were arrested at Tutuka for fraud, theft, and corruption.

Eskom said it paid for hundreds of millions of rands in goods and services which have not been delivered or rendered at the power station.