20 December 2019
The police said on Thursday that two former Eskom senior managers have been arrested for alleged fraud and corruption amounting to $52 million at Kusile Power Station (in picture above). Abram Masango, the former group executive for capital projects, and France Hlakudi, the former contracts manager for Kusile were named by Daily Maverick as those arrested. The suspects were arrested by the Hawks Serious Commercial Crime Investigation team in collaboration with the National Prosecuting Authority’s Investigative Directorate.
The two former Eskom executives, and two other men, were granted bail of $21,000 each and will not be released until they post the full amount.
          According to investigative journalist Pieter-Louis Myburgh the charges partly stem from alleged kickbacks of more than $2 million that Tubular Construction CEO Tony Trindade and the company’s former chairperson, Mike Lomas, paid to Masango and Hlakudi. Myburgh also said that Trindade and Lomas will also be charged. All the accusations are related to a $84 million contract which Tubular Construction won to build two Air Cooled Condensers (ACC) units at Kusile power plant.
Hitachi Power Africa, a subsidiary of Hitachi, was also found by the US Securities and Exchange Commission to have made US$6 million in corrupt payments to a front company for the African National Congress in relation to a boiler contract for Kusile and Medupi. Hitachi agreed to pay US$19 million to settle the charges.
          President Cyril Ramaphosa said that sabotage at Eskom caused last week’s unprecedented Stage 6 load shedding and he has directed the police and the State Security Agency (SSA) to investigate the matter. Earlier this week Police confirmed that a multi-disciplinary task force was investigating the alleged sabotage and tampering, damaging or destroying of electrical network infrastructure at Eskom.
Eskom is hamstrung by staggering debt, maintenance issues and design flaws at Medupi and Kusile. Ratings agencies have identified the state power utility as the single largest risk to the economy.
Public Enterprises Minister Pravin Gordhan recently said that a forensic probe was underway to examine the work of some contractors working on Kusile and Medupi power stations. He said Kusile and Medupi’s three units should be producing 780MW, but they were not due to some contractors’ work at the two power stations falling short of design and quality.