Eskom’s rapid spending to beat the electricity crisis is spreading largesse in high places, with a minister’s wife and a controversial African National Congress (ANC) fund-raiser, set to share in a billion-rand contract.
Start-up Johannesburg company Continental Africa Power Supplies concluded the contract to supply Eskom with transformers in April.
Two major stakeholders in Continental Africa are Thuthukile Skweyiya, a former ambassador to France and wife of Social Development Minister Zola Skweyiya, and Professor Taole Mokoena, who chairs controversial ANC investment company Chancellor House.
Mokoena, his wife, Dr Tlalane Lesoli, and Skweyiya control 60% of the company.
Mokoena failed to comment other than to confirm his family interest. The Mail & Guardian revealed last November that Chancellor House itself had a stake in a consortium which won contracts worth R38-billion to supply boilers for two new Eskom power stations.
In response to criticism about the inherent conflict of the ANC benefiting from government contracts, ANC treasurer Mathews Phosa promised in February this year that the company would exit that deal “immediately”.
He said this week that it was not yet done. “The process is on— It is going to be done properly.”
Skweyiya asked: “What does it mean, that people who are politically connected must never get involved in a business venture?”
She said she was a businessperson contributing to economic growth and that there was no conflict as her husband’s ministry was not involved.
Skweyiya, who has wide-ranging business interests, has previously been embroiled in controversy involving a party fundraiser.
The M&G revealed in 2005 that businessman Sandi Majali had paid R65 000 towards renovations at the Skweyiyas’ home. Majali was at the centre of the Oilgate scandal which saw money channelled from parastatal PetroSA to the ANC before the last elections.
Eskom is planning levels of infrastructure spending unrivalled in parastatal history to expand capacity. Chief executive Jacob Maroga reportedly told an electricity summit this week that the capital investment programme, currently projected to cost R1,3-trillion by 2025, is likely to escalate further.
The power utility has awarded a number of large contracts this year for transformers, which are used to ramp up voltage for long-distance transmission and then bring it down for distribution to consumers. Two of these contracts were well publicised, but Continental Africa’s was not.
Powertech Transformers, a subsidiary of industrial group Altron, announced jointly with Eskom two weeks ago that it had signed a seven-year R1,37-billion contract to supply locally manufactured transformers.
Zest Electric Motors and Drives, an established firm which supplies products from a Brazilian manufacturer, announced in January that it had signed a similar seven-year contract.
Continental Africa was founded two years ago and supplies transformers manufactured in Iran. This week Eskom confirmed its contract, worth R1,05-billion and also for a period of seven years. Eskom said in a statement that it “went through an open competitive tender” involving local and foreign suppliers.
Continental Africa’s shareholder profile “did not in any way influence Eskom’s decision to award the contract — [It] was based on a robust evaluation of the company’s financial, technical and quality compliance and most importantly the manufacturing capacity of their factory.”
About Continental Africa
Continental Africa Power Supplies is described in a web reference as the local agent for an Iranian manufacturer, Iran Transfo Corporation.
Its directors are listed as Professor Taole Mokoena, who chairs ANC investment company Chancellor House; his wife, Dr Tlalane Lesoli, Erich Herbst; and Kuno Stielau.
The company’s share register shows companies controlled by Herbst and Stielau own 20% each, while Rammotsi Trust Investments Holding and Zawadi Investments each hold a 30% stake. The Rammotsi Trust is a Mokoena family trust, while company filings show Zawadi to be controlled by Skweyiya and Lesoli.
Continental Africa Power Supplies is part of a wider group of companies under the Continental banner active in fields ranging from commodity trade to resources and medicine.
A number of these companies are co-owned by Mokoena personally or Chancellor House.
Continental Africa director Stielau this week denied Chancellor House or the ANC-held shares in Continental Africa Power Supplies specifically.
Another group company, Continental Health Holdings — one-third-owned by Chancellor House — signed a memorandum of understanding with a Russian company in March last year to investigate the establishment of rural tele-medicine units.
This was during a state visit by then Russian premier Mikhail Fradkov.
A fertiliser deal signed at the same time between Chancellor House and a Russian company attracted criticism because the ANC company used a state opportunity to seek profit. The Chancellor House stake in Continental Health Holdings was not public at the time.