Eskom’s R1?billion broker shock

2014-11-30 16:00

In just five years, Eskom has spent at least R1?billion of taxpayers’ money on a labour consultancy, which made the ailing power giant pay double for contractors.

The consultancy, Khum-BIE, has now taken Eskom to the South Gauteng High Court to fight for money it’s owed. Its directors are Byron Jansen van Rensburg, a Joburg businessman, and former City Power boss Mogwailane Mohlala.

City Press’s sister paper, Rapport, obtained court documents this week as Eskom appealed to fed-up South Africans to use power sparingly and brace themselves for more load shedding.

Trade union Solidarity is representing three former Eskom contractors in arbitration before the Commission for Conciliation,

Mediation and Arbitration after they had been recruited by Khum-BIE, but suddenly lost their jobs in October 2013.

Invoices in the court documents in Khum-BIE’s fight with Eskom reveal that the company made the utility pay double for the three Solidarity members’ services.

The services of one contractor, Johan Jacobs, cost Eskom R1?096 per hour in August last year, according to the invoices.

But Jacobs’ payslip from Khum-BIE shows he was only paid R535 per hour. He said even that rate was high for the industry.

The other Solidarity members also only received less than half the fees charged by Khum-BIE for their services.

According to another court document, Khum-BIE’s services for August and September last year cost Eskom R150?million.

Khum-BIE says in the document it spent about half that amount on contractors, salaries and subcontracted labour. It is not clear what the other R75?million was used for.

Eskom paid more than R1?billion to Khum-BIE between 2009 and October 2013, documents reveal. Khum-BIE was one of five companies that supplied hundreds of contractors to Eskom and the amount the utility spent on labour expenses could still climb dramatically as details of the four other contracts emerge.

Last year, Eskom was forced to dismiss hundreds of contractors – mainly quality-control engineers – because it could no longer afford the high costs of the consultants it had recruited.

One of the engineers told Rapport on Friday the quality control they applied in particular at

Eskom’s new power stations was critical and that the recent power crisis when a coal silo at Majuba Power Station in Mpumalanga collapsed, could have been avoided if the power giant had responded to the warning about the silo’s condition that his team gave in a report more than a year ago.

Eskom declined to comment on its court battle with Khum-BIE, or to supply information about its dealings with other labour brokers. “Given the court case between the parties [Eskom and Khum-BIE], we cannot provide further details or answer your questions,” said Eskom’s media team in an emailed response.

Mohlala denied his company charged Eskom too much for the contract workers. “We never made Eskom pay more than the fees agreed upon in the contract. I would like to provide more information on the issue as soon as the trial is completed.”

Meanwhile, Jacobs and dozens of former Eskom workers recruited by Khum-BIE are struggling to keep their heads above water.

“I had a good job at a company when Khum-BIE approached me to work for Eskom. They said there was work for about 15 years,” said Jacobs, who is now running a coffee shop with his wife in Benoni and sometimes resorts to welding and construction work to make ends meet.

He said Eskom would have saved taxpayers billions if the utility had appointed its own staff.

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Comments have been closed for this article.

Inside News24

 
/News

Book flights

Compare, Book, Fly

Traffic Alerts
Traffic
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.