‘R178 billion just the tip of Eskom corruption iceberg’

Eskom has conceded that it is difficult to find any contracts at the utility not tainted by corruption, while an independent energy expert maintains the supposed R178 billion in graft uncovered at the company is just a drop in the ocean.

Eskom responded to allegations of corruption on Tuesday following revelations that the power utility spent approximately R178 billion on flagged contracts in the past decade.

This is after News24 reported that investigations conducted by law firm Bowmans and the Special Investigating Unit (SIU) found a slush fund created by senior executives in order for contractors to pay millions to finance their luxurious lifestyles.

It is alleged that contracts were even awarded for milk, tea and toilet paper at exorbitant prices.

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Asked by The Citizen on Tuesday morning if the amount was more or less than R178 billion, Eskom spokesperson Sikhonathi Mantshantsha replied: “I did not say the figure is not accurate. I said that is News24’s calculation not Eskom’s.”

Mantshantsha, however, did concede it was difficult to find contracts that did not involve some form of corruption, with Eskom having opened more than 110 criminal cases with law enforcement agencies.

‘Drop in the ocean’

Energy expert Ted Blom argues that the reported R178 billion was just a mere “drop in the ocean”.

“I’m sitting on information that indicates there is another R800 billion of corruption that still needs to be brought to the surface and investigated,” he told Classic Business 1027.

Blom said Bowmans had approached him to assist in their investigation.

“Bowmans approached me some time ago and they wanted my files [regarding Eskom]. At that time I said listen here, I have worked very hard to try get these things together… [and Bowmans wasn’t] cooperative in terms of the remunerating me for work that I have done before I hand the files over. Then I had the Tegeta-Eskom supply contract for R10 billion cancelled. So that R10 billion we can say it was safely saved from the Gupta days,” he said.

He indicated that the Medupi power station contract was initially valued at R34 billion.

“The initial Medupi contract tender, which I saw with my own eyes, was at R34 billion. The current Medupi cost-to-completing is over R200 billion… they’re standing at about R175 billion where we stand today and the project is not yet complete,” he said.

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Blom said the initial Ingula tender was for R9 billion. However, the amount ballooned to R40 billion by the time former president Jacob Zuma’s “cosy friends got their fingers into that pie”.

“[All these contracts] should be investigated and cancelled…. and with that we would have a total reduction of Eskom’s debt from R400 billion down to about R40 billion before the corruption got out of hand.

“Needless to say I haven’t calculated the nuclear corruption of 2008. There were certain people, including members of the government, who walked away with $2.5 billion as well as some of the major coals [contracts] prior to 2008,” he said.

Blom said he had proof that Eskom’s internal audit team was equally corrupt.