Eskom
By Karabo Marifi
At least six people are expected to appear in court this week in connection with a fraud scheme at the Kusile Power Station in Mpumalanga. The arrests, which took place last week following a “coordinated intelligence-driven operation” and investigation, have exposed a fraudulent procurement scheme that cost Eskom dearly. This development underscores the deep-rooted challenges of corruption within South Africa’s state-owned power utility and its critical energy infrastructure.
Unpacking the Fraudulent Procurement Scheme
Eskom revealed that the fraud centred on the unlawful procurement of a pump in 2018 for R857,977. Shockingly, an identical pump with the same serial number had been purchased in 2015 for just R18,835. This glaring price difference—over 45 times the original cost—resulted in a direct financial loss for Eskom, highlighting the audacity of the scheme. The power utility described the transaction as a clear case of fraud, orchestrated by individuals entrusted with managing procurement processes at Kusile.
Who Was Arrested?
Among the six individuals apprehended are a former Kusile Procurement Officer and a Procurement Manager, both accused of playing pivotal roles in the scam. According to Eskom, their arrests followed a meticulous investigation that uncovered their involvement. However, two additional suspects remain at large, with law enforcement agencies actively pursuing their capture. The operation reflects a determined effort to hold those responsible accountable, regardless of their positions.
A “Coordinated Intelligence-Driven Operation”
The arrests stem from a “coordinated intelligence-driven operation” led by the National Joint Operational and Intelligence Structure (NATJOINTS) Energy Safety and Security Priority Committee. This multi-agency task force is tasked with tackling fraud, corruption, and criminal activities within Eskom, its supply chain, and South Africa’s broader energy infrastructure. Eskom emphasized that while these investigations are “thorough and time-intensive,” the recent arrests mark “significant progress in ensuring accountability and justice.”
Eskom’s Anti-Corruption Drive
Eskom Group Chief Executive Dan Marokane reaffirmed the company’s resolve to stamp out corruption. “Our commitment to eliminating corruption within Eskom remains unwavering. By far the vast majority of our employees demonstrate integrity and dedication, and those who engage in wrongdoing will increasingly face investigation and action,” he said. This statement comes as Eskom collaborates closely with law enforcement to investigate fraud and corruption cases, signaling a zero-tolerance approach to misconduct.
Public Urged to Report Fraud
Eskom has called on the public to assist in its anti-corruption efforts by reporting any fraud, theft, or illegal electricity sales. Tips can be submitted anonymously via the Eskom Crime Line at 0800 11 27 22 or WhatsApp at 081 333 3323. This initiative highlights the importance of community vigilance in rooting out corruption and protecting South Africa’s energy resources.
Kusile Power Station: A Vital Yet Troubled Asset
Located in Mpumalanga, the Kusile Power Station is a cornerstone of South Africa’s energy strategy. Once completed, it will be one of the world’s largest coal-fired power stations, capable of generating 4,800 megawatts of electricity. However, the project has been marred by delays, cost overruns, and allegations of corruption. Originally budgeted at R81 billion, its costs have ballooned to over R161 billion, according to reports from Business Day and News24. The recent fraud scheme adds to the station’s troubled history, raising concerns about its ability to deliver reliable power to the grid.
New Details: A Pattern of Procurement Issues
Further investigation into Eskom’s procurement practices reveals this is not an isolated incident at Kusile. In 2022, the Special Investigating Unit (SIU) uncovered irregularities in contracts worth over R1.4 billion at the power station, as reported by TimesLIVE. These included inflated prices and payments for goods never delivered. The latest arrests suggest that systemic weaknesses in oversight and accountability have allowed corrupt practices to persist, draining Eskom’s already strained finances.
The Bigger Picture: Corruption’s Toll on South Africa
Corruption at Eskom has ripple effects beyond financial losses. With the utility battling a R400 billion debt and struggling to end load shedding, every rand lost to fraud undermines efforts to stabilize the country’s energy supply. The Mail & Guardian notes that corruption has contributed to Eskom’s operational inefficiencies, leaving millions of South Africans in the dark. Economists warn that persistent energy insecurity could shave points off GDP growth, deterring investment and deepening poverty.
Echoes of State Capture
The Kusile fraud scheme echoes the broader state capture scandal that rocked South Africa during Jacob Zuma’s presidency. The Zondo Commission, which investigated state capture, implicated companies like Trillian and McKinsey in irregular contracts with Eskom, costing billions. While the Kusile case involves internal actors rather than external firms, it reflects a similar culture of impunity. The arrests signal that authorities are now taking decisive action, but public skepticism remains high given the slow pace of justice in past cases.
