Corruption and incompetence at Eskom’s Soweto division have led to a management shake-up, reports Andy Duffy
ESKOM is quietly replacing top staff at one of its largest divisions after an independent investigation uncovered rampant corruption and incompetence among senior management.
The parastatal declines to detail the shake- up at the Soweto division, saying its plans are still being discussed with management and unions.
The investigation, undertaken by Independent Mediation Services of South Africa (Imssa) earlier this year, has also been kept under wraps until now.
But Eskom has already shunted out Soweto division chief Ken Green, and transferred several of his underlings to other Eskom units.
Imssa says senior heads should roll. Its three-month inquiry, prompted by union claims, found most of the 56 allegations it investigated to be true. Its 200-page report is a damning indictment of the division’s management.
The inquiry’s findings include:
* Management handing lucrative contracts to firms owned by former Eskom staff.
* Management failing to keep tabs on a disastrous R60-million meter contract last year.
* Management accepting a night out at Sun City paid for by its contractors – Green’s explanation was “so improbable as to be untrue”.
* Eskom paying employment agencies R50 000 a month for effectively doing nothing – “it is perfectly reasonable … to draw the inference of kickbacks being given to management”.
* Managers helping themselves to Eskom property, and running their own businesses from Eskom offices during working hours.
The report’s other findings include management harassment of unions, apathetic performance by Eskom’s internal investigators, and a breakdown in stock records which left the door wide open to theft.
The inquiry recommended disciplinary action against nine division managers. Those named include Green, area managers Anton von Loggerenberg, Beaudine Symms, Mike Farmer, supervisors Sean Cooper, Ricky Dick and Frans Palm, and engineering department staff John Calvert and Jacques van der Brooke.
“There are serious problems … regarding the discipline of management, the inconsistent and unfair practices of management, the awarding of contracts, the huge benefits received by certain contractors who are owned and controlled by ex-Eskom employees, and racism,” Imssa commissioner Bashier Vally says in the report.
“If the respective people are found to have breached Eskom’s policy, dismissals should not be avoided.”
The report says several managers had tried to mislead the inquiry. Several were deemed grossly negligent, others were “at best incompetent”.
The division has been vaunted as one of Eskom’s success stories, particularly in cutting the levels of non-payment among users to less than 30% from 80% in 1994.
Eskom’s public relations office was initially unaware of the inquiry, but says the “management problem” is being handled internally.
“Some of the issues raised have been resolved and appropriate action taken already,” a representative says.
“Many of the issues arose out of circumstances that were temporary in nature and subject to rapid change, hence decisions were taken which were not the norm at Eskom.”
The report concentrates much of its fire on Eskom’s contract allocations. It calls for a full blown witch-hunt over the 1995 meter project in Soweto.
The contract involved installing 117 000 meters into Soweto homes after Eskom took over electricity distribution in the township from the city council.
The inquiry found that more than 22 000 of the meters had already been installed, and so should not have formed part of the budget. The R60-million budget was spent anyway. Contractors were also paid regardless of performance (many meters were left in the streets – in one area, after a house exploded during installation). Much of the work was handed to Prominent Electrical, a company owned by a former Eskom employee. Work worth R4-million done by Eskom company Roshcon was so poor it had to be repeated.
The inquiry called for Green to be disciplined after he and 16 staff members accepted gifts from two Eskom contractors. They were flown to Sun City in Easter 1995 by Diemech, which services and repairs all Eskom vehicles. Sipho Contractors, owned by former Eskom employee Ebon Pienaar, gave Green R3 000 to pay for the entertainment at the pleasure centre.
The inquiry also heard how the division’s security contractor Charlie Bravo was fired in September 1995 to make way for a company owned by a former Eskom employee, Albertus Muller. His firm, Icon, was registered six months before it won the R705 000 Soweto security contract.
Eskom’s use of employment agencies was open “to enormous abuse and to the raising of suspicions and allegations of corruption which are not unduly wild”, the report says.
Two agencies – Emmanuels and Executive Personnel – provided staff with the money- spinning work dished out to the agencies by one Eskom official. The agencies paid the employees 75% of what Eskom paid for the employees’ services. The agencies pocketed the remainder, totalling R50 000 in December alone, as “commission”.
The inquiry said the agencies were “on to a good wicket”. The staff they supplied Eskom, some since 1992, were just clerks.