Former Eskom CEO Andre de Ruyter said corruption continues unabated at Eskom and that the people controlling the corrupt networks are still free.
He added that underlying factors create an environment where corruption is enabled, including the procurement policy related to state-owned entities.
De Ruyter made these comments during an interview with Biznews’s Chris Steyn from the United States.
He resigned from Eskom in December 2022 and left the power utility with immediate effect in February 2023, following an explosive interview on eNCA.
In the interview, he accused the ANC of corruption and enrichment through Eskom. He added there was knowledge and support of corruption at the highest levels.
In May, De Ruyter released Truth to Power: My Three Years Inside Eskom. In this book, De Ruyter gave a behind-the-scenes look at how Eskom was crippled by corruption on a staggering scale.
He said at Eskom, no item was too small to serve as a conduit for the looting. It ranged from Eskom paying R26 for a R5 single-ply roll of toilet paper to ordering a mop for R238,000.
It goes much further. From 2012 to 2016, a company overcharged Eskom for fuel oil by an eye-popping R1.2 billion.
Eskom paid R400,000 for bearings worth R110,000. It was billed R370,000 for a compressor refurbishment, which should have cost R40,000.
In one case, Eskom even paid R80,000 for a pair of knee guards that cost R320 at Builders Warehouse.
De Ruyter said when he exposed this and other corruption through his interview and book, there was a significant outcry and some action.
“We saw soldiers being deployed to protect infrastructure. Quite how that was intended to counteract the pervasive effects of corruption, one wouldn’t know,” he said.
He added that there were changes to the senior command structures of the Mpumalanga police. “Typically, this is done when there is a lack of diligence in pursuing investigations into crime.”
SARS also investigated the tax affairs of people who were allegedly coal thieves who operated black sites where coal intended for Eskom was replaced with low-grade coal.
“It’s interesting that it was the tax authorities that took the lead in collecting some of the amounts that they claim are due to them rather than law enforcement,” he said.
However, despite the raid of some of the black sites, De Ruyter said that was only the tip of the iceberg.
He said the foot soldiers faced action. However, the bigger networks have not been properly investigated and pursued.
“We’ve not seen the arrests of people controlling these networks and, therefore, my supposition is that the corruption continues by and large unabated,” De Ruyter said.
“It is very concerning and plays a very considerable role in the continued lack of reliability of the coal generation fleet.”
The former Eskom CEO said there were underlying factors that created an environment where corruption was enabled.
Some of it relates to the procurement policy in place at all government departments and all state-owned entities.
“Preferential procurement, for example, gives the opportunity for non-value-adding intermediaries to insert themselves in the process,” he said.
These intermediaries add substantial margins on top of the market price if you buy equipment or consumables on the open market through a competitive bidding process.
“Those margins add significantly to the cost. Obviously, they add to the cost of doing business in South Africa, but they also detract from being able to run an efficient business,” he said.
“If any business had to inflate its procurement bill by 20% or 30%, it would be in a very challenging financial situation.”
De Ruyter argued that corruption will only end once the ringleaders are arrested and once they’ve been properly investigated.
He added that there needs to be a real and substantive look at the underlying factors that give rise to an environment where corruption can flourish.
“This includes the way in which the state buys goods and services,” he said.