Eskom still paying for corrupt Gupta coal deal

The Organisation Undoing Tax Abuse (OUTA) welcomes the immediate suspension of Abram Masango, Eskom executive for Group Capital on serious allegations of impropriety related to the Kusile build project.

“This is a step in the right direction,” says Ronald Chauke, OUTA’s Portfolio Manager on Energy.

“OUTA commends Eskom’s executive management team for diagnosing and acknowledging the power utility’s operational challenges and shortcomings in turning around this entity after a decade plagued by corruption, maladministration and poor corporate governance.”

OUTA also welcomes Eskom’s cooperation with law enforcement in prosecuting those implicated in wrongdoing, following Eskom’s tally of 1049 internal investigations, an increase in internal whistleblowing, the suspension of almost 260 officials and departure of 97.

“OUTA applauds Eskom striving to control its operational costs by not granting annual increases to its over-paid managers and ruling out bonuses,” says Chauke.

However, OUTA is seriously concerned about the ongoing threat of load shedding due to coal shortages.

“This is due to failure to take decisive action to secure supplies and failure to ensure the minimum standard of 20 days of coal stockpiles at each power station and poor plant performance,” says Chauke.

The failure of the coal supplies is directly linked to the capture of Eskom and the corrupt contract with the Guptas’ Tegeta, which is under business rescue. This contract was heavily criticised in today’s National Treasury report on corruption in Eskom.

This has left Eskom heavily dependent on the very expensive diesel-powered generators, which raises concern that Eskom will expect to recoup these costs in a future regulatory clearing account (RCA) price application.

OUTA recommends that Eskom finalise and publish its long-term business strategy, linked to the CEO's 9-point plan and the new coal strategy, to provide evidence of the entity's move towards becoming a sustainable business enterprise.