OUTA seeks enquiry into Eskom's audit and financial controls

Following the exposé by Carte Blanche on 21 August 2016 of gross irregularities, overspending, maladministration and possible corruption at Eskom’s Ingula Hydro Power generation scheme, we believe it is time for a full independent enquiry into the financial management and auditing controls throughout Eskom.

The Organisation Undoing Tax Abuse (OUTA) has learnt from the Carte Blanche exposé and other whistleblowers' input, that gross overspending on the Ingula project, located at the Freestate and KwaZulu Natal border, has become a serious issue. We furthermore believe that had Eskom ensured proper audit controls and management of contractor accountability, the overspending and irregularities would not have happened.

“We find the regular repetition of excessive runaway costs of large capital expenditure projects at Eskom, a gross violation of the Public Finance Management Act and fiduciary duties of the Management and Board at Eskom,” says Ivan Herselman, OUTA’s Director of Legal Affairs. “Any serious over expenditure of this nature needs to be thoroughly and independently investigated and accounted for, to the public.”

Last week, Eskom’s recent electricity tariff increase was ruled as having transgressed correct procedures and the SOE along with the National Energy Regulator (NERSA), are now having to revise the tariff increase and face a possible class action for this dire situation.

“The over expenditure issue at Ingula has once again provided the public with more reason to be incensed at the high electricity tariff hikes over the past nine years,” says Wayne Duvenage, OUTA’s Chairperson. “Eskom’s track record on capital expenditure projects at Medupi, Kusile and others, can be described as nothing short of diabolical and the Ingula matter just adds more fuel to Eskom’s fire of incompetence and unacceptably high operating and capital costs. One can imagine what lies ahead if Eskom are left to manage a Nuclear Energy build project.”

We will be accessing all avenues open to us in order to have this matter and others thoroughly investigated. We have seen a number of examples of gross violations of straight forward auditing process at Ingula, which have led to several unacceptable incidents of over expenditure at Eskom.

Similar to our intervention in SAA, we encourage any whistleblowers within Eskom who might have knowledge and proof of wrongdoing to come forward and provide information through a secure whistleblowing platform on the OUTA website.

We sincerely trust and hope that Eskom’s management won’t sweep this matter under the carpet, as it has done with so many other incidents in the past. The Eskom Board will now need to explain how such irregularities are able to exist under their noses and to display acknowledgment of this dire state of affairs to the public.  Furthermore, we trust that accountability and stringent disciplinary action will be taken against those who have been “asleep at the wheel”, including senior management at Eskom, and that the alleged billions of rands over spent will be retrieved from all contractors implicated.