NEWS

These Are All The Probes Eskom's Facing -- And It's A Lot

Parliament's hearing starting Tuesday is one of four set up to investigate state capture -- and that's besides all the other probes.

24/07/2017 13:13 SAST | Updated 24/07/2017 13:15 SAST

Power utility Eskom has been making headlines for the dire state of its finances, with rumours emerging last week that it is currently sitting on its last R20 billion. Despite this, the company still paid out millions in performance bonuses.

Brian Molefe resigned from his position as Eskom CEO after his alleged links with the Gupta family were revealed in the Former Public Protector Thuli Madonsela's "State of Capture" report.

Matshela Koko probe
Matshela Koko was then called in to be acting CEO of the state entity. He was suspended in May, pending investigations about his involvement in tender irregularities during his tenure as Eskom group executive. Last week, Eskom acting chair Zethembe Khoza announced that Koko would be facing disciplinary action for awarding tenders to Impulse International, a company where his step-daughter was a director at the time.

The state–owned company faced one of their biggest blows last week when its dealings with Gupta-owned company, Trillian, were revealed. On Wednesday, while releasing its annual financial results, Eskom said they had a contract with McKinsey who subcontracted Trillian to do consultancy work for them. McKinsey has denied this, saying it was concerned about Trillian's ownership and had informed Eskom that it was inaccurately named as having a contract in place with Trillian.

Zethembe Khoza and acting CEO Johnny Dladla admitted that the utility paid Trillian almost R500 million, despite denying this in May.

Read: Gupta-Linked Trillian Paid R266 Million For Eskom Work It Did Not Do

Nersa investigation
In May, the South African Wind Energy Association (SAWEA) confirmed that the National Energy Regulator's (Nersa) electricity sub-committee has launched a formal investigation into Eskom's conduct. A complaint was filed regarding Eskom's failure to sign the Department of Energy's Power Purchase Agreements.

SAWEA declared a dispute last October, requesting Nersa to undertake an investigation into Eskom's continued unwillingness to honour the Power Purchase Agreements. If Eskom is found guilty of failing to comply with its licence conditions, the industry association has further requested that Nersa impose a penalty, of 10 percent of its annual turnover per day, commencing on the day of receipt of the notice of contravention.

Parliament state capture probes
Parliament's public enterprises portfolio committee will begin a full-scale investigation into state capture at Eskom on Tuesday, 25 July.

The committee is one of four, set up by Parliament, to investigate state capture at the utility. House chairperson Cedric Frolick reportedly ordered the committees of home affairs, energy and transport to also investigate state capture at the parastatal.

The meeting will begin with testimony from the South African Council of Churches and the State Research Capacity Project about their apparently damning findings implicating top government and state-owned enterprises officials in links to the Guptas and their associates.

The committee has already sent letters to President Jacob Zuma's son, Duduzane Zuma, and the Guptas ordering them to appear before the committee. Duduzane is said to have several business ties with the Guptas.

'Fundamentally eroded integrity'
At the opening of the power sector stakeholder conference, Public Enterprises Minister Lynne Brown said: "While it is a fact that Eskom's operational performance has significantly improved, Eskom has also been embroiled in a series of serious allegations of maladministration and corruption. None of the allegations have been proven in a court of law yet, but they have fundamentally eroded integrity. Certain matters are now in court and I am constrained to say more about them."

Brown has said that she would be working closely with the Special Investigations Unit to investigate state capture at Eskom. The inquiry is expected to review the reports of seven investigations carried out so far into Eskom, including the State of Capture report, and to conduct further investigations if necessary.

Brown says that based on the recommendations of the inquiry, she may go to the National Prosecuting Authority (NPA) for further action.