Utility needs every cent to add to its kitty as it staggers under a massive debt burden of R392bn.
ESKOM has its work cut out to recover R15 billion lost to state capture after Chief Justice Raymond Zondo last week released a report detailing the extent of corruption that has bought the power utility to its knees.
The power utility needs every cent to add to its kitty as it staggers under a massive debt burden of R392bn.
This as it struggles to keep the lights on spending billions on diesel recently amid bad weather and infrastructure breakdowns.
Eskom, in a response to the fourth edition of Judge Zondo’s report on state capture, said last week that it had already taken steps to recover funds irregularly paid out to various suppliers and had over time recovered R1.1 billion from McKinsey, R1.577bn from ABB, as well as several other significant cases.
Eskom said it had furthermore initiated civil action to recover some of the monies lost to state capture, including R3.8bn in damages suffered by Eskom due to unlawful actions by those implicated in state capture.
The entity was also studying the report to identify whether there are implicated individuals still in its employ and would take appropriate action as required in line with its policies.
This is in addition to the numerous criminal cases registered with the South African Police Service over the years and disciplinary action taken against its employees implicated in the irregularities.
“Eskom has proactively set up a project team, supported by its internal and external lawyers, to ensure that the report is reviewed, understood and appropriate actions are taken to address recommendations made therein and to protect Eskom’s interests,“ it said.
According to Justice Zondo’s report, and points to roles played by former Eskom chief executive Brian Molefe, former chief engineer for generation and acting CEO Matshela Koko as well as former chief financial officer Anoj Singh.
A large part of the capture exercise involved fraudulent procurement of coal for Eskom’s power stations, mainly the Majuba power station, which was ring-fenced by Tegeta as a cash cow for inappropriate product with exaggerated invoices.
Eskom board chair Professor Malegapuru Makgoba said, “State Capture and its agents caused immense harm to Eskom over many years. We view the release of the commission’s report as an important step to ensure that more of those who undermined Eskom are brought to book, and we look forward to working with the National Prosecuting Authority to ensure that the miscreants speedily face criminal charges.”
President Cyril Ramaphosa last month said state capture has had a devastating effect on Eskom.
“Billions of rands were diverted from critical operational requirements at Eskom into private pockets … Eskom’s huge debt burden, including more than R36 billion of outstanding municipal debt, undermines Eskom’s ability to improve its maintenance, infrastructure build and other operations,” he said.
Last month credit rating agency Moodys kept its rating of Eskom at Caa1 with a negative outlook and warned that the power utility needed to reduce its debt burden and solve its operational issues.
The agency flagged that it had received equity injections from the government of roughly R137bn over the past three years.
The government had also committed to provide further support to Eskom of R88bn over the four years to March 2026.
In December Eskom reported a 4 000 percent improvement in net profit for the six months ended in September. The power utility reported a R9.2 billion interim profit for the six months ended in September, but was still expected to incur a R9.1bn loss when the financial year ends in March.
BUSINESS REPORT ONLINE