More money on the cards for Eskom, where the anti-corruption turnaround is gaining momentum

19 Oct 2022

An announcement on Eskom debt relief would be made by the finance minister in next Wednesday’s Medium-Term Budget Policy Statement, says the power utility’s Chief Financial Officer, Calib Cassim.

Speaking on Wednesday after Eskom’s five-hour stint before the parliamentary spending watchdog, the Standing Committee on Public Accounts (Scopa), Eskom CFO Calib Cassim seemed upbeat on moves to help tackle the parastatals estimated R400-billion debt.

“On debt relief the minister is going to make an announcement in the MTBPS [Medium-Term Budget Policy Statement],” he told Daily Maverick, adding that discussions on equity support were ongoing.

Eskom, which in 2020 implemented unprecedented levels of rotational power cuts that stifle economic activity, has been struggling with its debt burden. Talk that government may take over some of it on to its balance sheet, or provide other debt relief, has been making the rounds for at least a couple of months.

It will be up to Finance Minister Enoch Godongwana on 26 October to set out the rands and cents – and conditions, if any. But if he does so, it will be the second time in four years the troubled power utility is getting government support to sort out its debt that has choked other spending on things like infrastructure, renewable energy projects and coal plant maintenance.

In the 2019 Budget, then finance minister Tito Mboweni allocated the power utility an annual R23-billion for each of the next 10 years (Mboweni’s The Eskom Job: The devil lives in the details...), which, amortised, was the R150-billion Eskom at the time had been looking for from government.

Eskom did not submit its 2021/22 annual report and audited financial statements to Parliament by the 30 September annual deadline.

Public Enterprises Minister Pravin Gordhan, who is responsible for the power utility, said in a letter to Parliament on 26 September that indications were the audited financial statements would be finalised by the end of October or early November.

“The Eskom auditors have identified further significant key matters that will take some time to close out. Eskom had to appoint new auditors… While most issues have been finalised, there are still some outstanding material issues that delay the audit.”

The appointment of new auditors, completing litigation and outstanding matters in the generations field contributed to the delay on tabling the annual report, wrote Gordhan in the letter published in Parliament’s record of work, the Announcements, Tablings and Committee Reports.

On Wednesday, a last-minute question from ANC MP Sakhumzi Somyo on the outstanding audit and annual report was kicked for touch to a later Scopa meeting.

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The focus of the over five-hour meeting had been feedback on recommendations of Scopa’s April 2022 onsite oversight visit, and updates from the Special Investigating Unit (SIU) on its cases and referrals for disciplinary proceedings. Ditto, progress reports from the Hawks on its 83 cases involving, among others, theft, fraud and corruption.

Coincidentally, on Monday four Eskom employees and contractors were arrested for theft in two separate cases at two different power stations.

The Tutuka power station worker arrested for removing from a storage facility 10 drums of hydraulic oil valued at R800,000 appeared in the Standerton Magistrates’ Court, but remained in custody pending a bail application.

Meanwhile, three cleaning contractors were arrested on Monday at Matla power station for stealing copper cables, according to an Eskom statement issued on Wednesday afternoon.

Of the Hawks’ 83 investigations, one concerns a bomb threat and another relates to immigration offences, while the theft cases involve coal, diesel, copper cables and electricity. However, 41 are fraud and corruption cases.

At least 18 of all the cases are in court, according to the Hawks presentation to MPs.

According to the SIU, the 334 conflict of interest investigations at Eskom have led to 117 disciplinary referrals. Of those, 67 resulted in guilty verdicts and 18 acquittals, while 19 employees resigned and four retired.

Of the 5,464 failures to file financial declarations, 5,438 have now been finalised, with 3,875 disciplinary processes already under way.

From the 34 red-flagged lifestyle audits, 11 have been finalised, leading to seven guilty verdicts, two acquittals, one resignation and one retirement.

Civil and other steps are now under consideration, according to the SIU presentation.

In some instances, Eskom officials had manipulated the procurement systems in such a manner that their preferred company succeeded – often because vendors paid kickbacks.

SIU boss Andy Sotheby told MPs “investigations have uncovered the organised crimes that there are at Eskom, and the schemes and collusion…”, adding that he welcomed Eskom’s cooperation and action on this front.

Lifestyle audits, particularly in areas like procurement, were a good tool to assess risk, he said, adding that these would then give rise to further investigations and action, be that internal disciplinary or charges of a criminal nature.

Meanwhile, Scopa has scheduled a meeting with the State Security Agency (SSA) for 9 November to discuss continuing delays in security vetting, as “the vetting unit at the SSA has a significant backlog”.

Only a handful of Eskom’s top executives have obtained some clearance. CEO André de Ruyter, who was appointed in January 2020, still has no security clearance, according to documents submitted to Wednesday’s Scopa meeting.

Coincidentally, the SABC is without a permanently appointed board as Parliament’s communications committee said it could not make recommendations without SSA vetting, and that had been delayed. The SSA is on public record that its vetting systems are working.

At the end of the meeting, Scopa chairperson, IFP MP Mkhuleko Hlengwa, told Eskom executives and newly appointed board chairperson Mpho Makwana that certainty was needed over the rolling power cuts – not “grey language” at best, or obfuscation at worst.

“The people need certainty. The economy needs certainty,” said Hlengwa.

“If it is four years (of rotational power cuts), tell the country now, ‘For the next four years we are stuffed’. Otherwise, we are normalising load shedding as a permanent reality.”

The takeaway from Scopa on Wednesday? Eskom may not be able to keep the lights on 24/7, but moves are under way against those who’ve dipped into the state-owned power entity for their private gain. DM

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