Photo Credit:Waldo Swiegers.
Members of Parliament have heard how R44.4 million was channelled from Eskom’s contractors, through sub-contracted companies, to four Eskom officials in a Special Investigating Unit (SIU) probe, which has led to four arrests.
Briefing the National Assembly’s Standing Committee on Public Accounts on Wednesday, the SIU told MPs that suspicious payments by four contractors were picked up by investigators, and unlawful payments that were traced to four Eskom officials pointed to evidence of fraud, money laundering and corruption.
The suspicious payments, totalling R136 million, were paid by the four contractors to two sub-contractors, who in turn paid R44.4 million to the four Eskom employees.
Said SIU head Advocate Andy Mothibi: “We are really heartened to see these kinds of outcomes. We believe that if all of these are actioned as we intend to, we will send the appropriate message.
“We will send a message that [will deter] those who may still be… planning to do nefarious acts, and we would like to root those out.”
He said while some Eskom officials resigned after they were red-flagged for various corrupt activities, including being found to be doing business with the State, some will be referred to the National Prosecuting Authority in instances where further evidence of crime is found.
Briefing MPs ahead of Mothibi’s remarks, the SIU lead investigator at Eskom, Claudia O’Brien, said after conducting lifestyle audits, Eskom red-flagged and referred 34 officials to the SIU for further investigation.
“So far, we have referred eight of these officials for disciplinary proceedings and seven officials have resigned. In the appropriate instances, we will still proceed with referrals to the NPA [National Prosecuting Authority], while 19 investigations are still ongoing.”
O’Brien said the SIU has identified 324 Eskom officials, who are linked to entities that are Eskom vendors. She said 135 of these were found to have conducted business with Eskom, to the value of at least R6 billion.
“…We have made 5 512 referrals to Eskom to institute disciplinary proceedings.
“Sixty of these referrals are in respect of officials, who are either doing business with Eskom or who failed to declare their interests in outside business entities.”
O’Brien said seven cases have been referred to the NPA for officials found to be doing business with Eskom, while eight are in the process of being prepared for referral.
Meanwhile Eskom has welcomed what it deems as a landmark judgment after the High Court affirmed the utility’s right to terminate electricity supply to defaulting, non-paying customers.
The South Gauteng High Court handed down the judgement on Tuesday.
Eskom said it was now in a position to enhance all its collective efforts from defaulting municipalities that collectively owe the utility more than R31 billion in overdue debt.
Pioneer Foods brought the case against Eskom seeking to review and set aside Eskom’s 2018 decision to interrupt electricity supply to the Walter Sisulu Municipality due to its failure to pay for electricity supplied in terms of the municipality’s agreement with Eskom.
“The court ruled that Pioneer Foods had no standing in the electricity supply agreement between Eskom and the municipality, and dismissed the application with costs,” said Eskom in a statement on Wednesday.
According to the power utility, Pioneer Foods is a customer of the municipality, and as such had no legal right to bring the case against Eskom to court.
“This is a landmark judgment affirming the validity and lawfulness of Eskom’s rights, powers and entitlement to invoke section 21(5) of the Electricity Regulation Act of 2006 to interrupt the supply of electricity to a delinquent customer, in this case, the Walter Sisulu Municipality in the Eastern Cape,” Eskom said.
The ruling also set the important legal principle that Eskom is only obliged to supply electricity to paying customers.
“The Electricity Regulation Act of 2006 entitles Eskom to interrupt electricity supply to a non-paying customer and in this matter; Eskom had taken proper preliminary steps and due process which did not entitle the applicant to the interim interdict.”
The court also held that Eskom’s interruptions of supply to the defaulting municipality were important and necessary for its survival.
“Pioneer had an available internal remedy which entailed lodging a dispute with the National Energy Regulator of South Africa (NERSA).”
The court held that before an aggrieved party approached it for relief against Eskom; it should demonstrate that it first exhausted the internal remedies contemplated by the Electricity Regulation Act by approaching NERSA.
“The relationship between Eskom and the municipality is reciprocal in that Eskom supplies bulk electricity against payment.”
Eskom has committed to ramping up its effort to collect the unpaid municipal debt to improve its own coffers.