NEWS

Eskom's Money Woes No Surprise As Evidence Of Looting Mounts

“We have become immune to the word million because we are now used to billions. The rot at Eskom is unbelievable; billions have been stolen.”

14/11/2017 06:16 SAST | Updated 14/11/2017 06:16 SAST
Waldo Swiegers/Bloomberg via Getty Images

As MPs prepare to continue their probe on Tuesday into corruption and fraud at Eskom, news broke of concerns over the power utility's financial health.

Fin24 said on Monday that the state-owned electricity producer's latest quarterly report to Public Enterprises Minister Lynne Brown "showed that the utility's liquidity is fast drying up", and it was struggling to raise funds in an unsympathetic market.

The publication said it had seen the report, which deals with the second quarter of this year, and it "painted an alarming picture of funding difficulties and declining liquidity, primarily driven by perception of poor governance".

Such perceptions will come as no surprise to members of Parliament's public enterprises portfolio committee, who have spent eight days over the past four weeks listening to damning evidence from former senior Eskom executives, and others, on the extent of the corruption and looting at the utility, which appears to have started in earnest about a year after President Jacob Zuma took office in 2009.

It has been the testimony of those who have appeared in earlier sessions that has left MPs alarmed, if not frightened, by the impact that so-called state capture at Eskom is having on the country's economy.

Among the more sensational testimony was delivered on Thursday last week, by suspended Eskom legal services head Suzanne Daniels, who told the inquiry that Ajay Gupta had said he would speak to someone in the deputy judge president's office to have a court case over former Eskom CEO Brian Molefe's R30-million pension payout deferred to next year.

She told the committee, under oath, that Gupta had said this as recently as July this year, at a meeting in Johannesburg where Zuma's son Duduzane Zuma and deputy public enterprises minister Ben Martins were also present.

On Friday last week, Martins called a press conference at which he strongly denied he was present at the meeting.

But it has been the testimony of those who have appeared in earlier sessions that has left MPs alarmed, if not frightened, by the impact that so-called state capture at Eskom is having on the country's economy.

Some sense of its scale can be gauged from the testimony of UCT academic Professor Anton Eberhard, who appeared before the inquiry at it first sitting, on October 17.

"Burgeoning costs, arguably propelled by rent-seeking and corruption, have resulted in electricity tariffs increasing by more than 400 percent over the past decade while electricity services have deteriorated.

"The effects of this on the South African economy and prospects for economic development and transformation are huge, and reinforce the urgent need for governance and structural reform at the utility," he said.

The amount of unaccounted for money is staggering. According to Outa energy head Ted Blom, who gave testimony on the second day of the inquiry, "there is at least R200-billion that needs to be explained".

DA MP Natasha Mazzone is one of the committee members enraged by the scale of the looting.

"We have become immune to the word million because we are now used to billions. The rot at Eskom is unbelievable; billions have been stolen."

There are equally alarming political implications to some of what the inquiry is hearing.

The amount of unaccounted for money is staggering.

Former Trillian senior manager Mosil Mothepu testified on October 31, during the inquiry's fourth session, that the company's CEO Eric Wood had known six weeks before it happened that former finance minister Nhlanhla Nene was going to be fired.

Nene was sacked by President Jacob Zuma on December 9 2015, and replaced by little-known ANC MP David "Des" van Rooyen, a decision that plunged the country, and the rand, into crisis.

Mothepu also claimed the consulting company's chief executive had also had prior knowledge of Pravin Gordhan's removal as finance minister earlier this year in Zuma's controversial Cabinet reshuffle.

Tuesday's sitting of the inquiry is expected to continue with its focus on Eskom governance, though who will appear before it is not known. At least four of the 40 "witnesses" expected to appear before it have received death threats, and the committee has been reluctant to publicise a list of those set to give testimony.

The inquiry will focus on Eskom matters up to the end of this year, but is expected to shift its focus to other state-owned companies when Parliament starts up again next year. According to the committee chair, the investigation could run up to about July next year.