Contractors to be investigated for looting Eskom of R500 Billion

Go see the latest issue of the Newcastillian – Online Magazine at www.newcastillian.co.za

The Sunday Times reports 11 contractors are currently under investigation for stealing approximately R139 billion during the construction of Eskom’s Kusile, Medupi and Ingula power plants.

According to the Sunday Times, the looting from the power company can be as much as R500 billion since 2005. The Special Investigating Unit (SIU) is currently investigating the theft of R170 billion from Eskom. The biggest portion allegedly related to the power plants.

Nazreen Pandor, SIU spokesperson, says the unit is investing the performance and payment of more than R139 billion made to 11 identified contactors appointed by Eskom.

Earlier this month, Pravin Gordhan, the public enterprises minister, stated the Medupi and Kusile plants are not only poorly designed but badly constructed as well.

The power plants were meant to be fully operation in 2015 and add almost 9,600 megawatts to the grid. However, the plants are nowhere near completion and the projected build costs are doubling to R292.5 billion.

Gordhan has approached Italy’s biggest power utility, Enel SpA, to help provided technical support. He claims the company will send engineers to SA in the foreseeable future.

Eskom will be receiving the biggest bailout in the nation’s history, following the government stepping in to prevent its collapse within the past week.

Eskom will receive a R69 billion cash injection over the next three years. This is to help service its debt and free up cash for operations.

Furthermore, part of Eskom’s transmission business will be sold to private investors. Allegedly this is to help reduce costs.

At the moment, Eskom has R419 billion in debt and isn’t selling power to cover its interest payments and operating costs. This exorbitant sum of money reflects a legacy of years of mismanagement and over expenditure.

With plans to help Eskom, what are your thoughts on the situation? Share your views in the comments section below.

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