Inquiry hears of big money and coal missing from Eskom coffers

Eskom has a history of kickbacks, said the Organisation Undoing Tax Abuse’s head of energy Ted Blom. On Tuesday at the parliamentary inquiry into the power utility’s governance, Blom said that R1-trillion loaned to Eskom and approximately seven rugby fields of coal have gone missing.

According to Blom, the self-proclaimed whistleblower of corruption at Eskom, ever since the Public Finance Management Act (PFMA) law came into existence, Eskom has been in breach of it and has not re-negotiated its tenders on an open tender system.

The issue with tenders has run deep. Blom has noted there are at least a 1 000 cases of alleged tender corruption that have not been brought before the parliamentary inquiry.

In his report, Blom also said that Eskom is paying four times more for coal than it should be, and that 400 000 tonnes of coal that it had paid for is now missing. 

Over a period of a few years, Eskom’s assets were also increased from R200-billion to R700-billion in value. The issue, said Blom, is that no new projects had been completed.

“The extent of the inefficiency is mind-boggling” said Blom, who indicated that Eskom borrowed R480-billion from the government to pay for R93-billion worth of assets. Effectively, Blom noted, Eskom has paid 14 times more than the market value of its assets.

“Even if you privatised Eskom today, you would only make R200-billion” he said.

The over-valued assets are a result of Eskom’s high growth forecast in order to guarantee itself profits whether or not it provides the energy, said Blom. The evidence for the forecasting, Blom has noted, was in the National Energy Regulator of South Africa’s ability to drop the price of energy by 10% after spending much time qualifying its amount.

A public entity’s money as a plaything for the Guptas

To make matters worse, Eskom is also running at a R27-billion loss to date. Blom has said that the debt is due to Eskom giving the Gupta-owned company Trillian its derivatives to “play with”.

In total, more than a trillion has moved through Eskom’s treasury, Blom said. The government has sold shares in Vodacom to bailout Eskom and the government has loaned the parastatal R60-billion. Blom said Eskom won’t be able to pay back the money it has borrowed. 

According to Blom, despite the denials of wrongdoing from people in Eskom, a crime report that has recently been released which has implicated at least 50 people in Eskom’s state capture.

To uncover the extent of corruption, Blom wants the inquiry to initiate an amnesty to encourage individuals to blow the whistle on instances of corruption. The former Eskom employee has based this call on being tipped off to greater depths of corruption in Eskom and he says that people will be fearful of either losing their job or facing criminal prosecution for not speaking out about corruption earlier.

An actual Black Friday deal

Subscribe for R2/mth for the first three months. Cancel anytime.

Subscribers get access to all our best journalism, subscriber-only newsletters, events and a weekly cryptic crossword.

Related stories

WELCOME TO YOUR M&G

Already a subscriber? Sign in here

Advertising

Latest stories

Western Cape schools benefit from zero waste project

The initiative provides schools with a toolkit to reduce the waste they send to landfills by recycling more effectively

The Mozambican criminal who escaped from South African prisons, twice

A rhino-poaching suspect, who recently escaped from police custody, has been identified as a criminal who was serving multiple life sentences when he broke out of prison last year

As Reserve Bank eyes inflation, jobs suffer

The central bank has been criticised for hiking interest rates to the detriment of employment

Why Ace Magashule witness is refusing to testify

A recording of the Hawks’ interview with a former secretary of the ANC strongman – who faces extradition from the US – gives insight into why the state’s case against him may unravel
Advertising

press releases

Loading latest Press Releases…
×