Eskom irregular spend will make Trillian payments 'look like peanuts'

Cape Town – MPs of the portfolio committee on public enterprises were urged to place Eskom's financials under close scrutiny during its imminent inquiry into governance and procurement at the state utility.
 
The SA Council of Churches (SACC), the Organisation Undoing Tax Abuse (OUTA) and the State Capacity Research Project led by a group of academics made submissions to Parliament on Tuesday, giving a broad overview of their investigations into state capture.
 
SACC general secretary Malusi Mpumlwana said in his presentation there is a perception that the religious sector should not get involved in politics, but this has become imperative given the current crisis of governance and allegations of looting of SA’s state-owned enterprises.
 
Ted Blom from OUTA, who presented on Eskom, specifically alluded to the irregular expenditure at the power utility which came to light when it presented its financial statements for the year ended March 2017 last week.
 
Blom urged MPs to look into Eskom’s irregular expenditure of R3bn. This irregular expenditure, he said, requires closer scrutiny, because it comes down to payments that had been made without source documentation.
 
“This is a case for serious concern and these irregularities will make the payments to McKinsey and Trillian look like peanuts,” said Blom.

Blom also asked the committee to look into the escalation of Medupi, Kusile and Ingula building costs. Medupi’s costs, for example, escalated from an initially earmarked R32bn to its current R150bn, he said.

'Eskom’s money has been blown away'

“We are concerned that Eskom’s money has been blown away,” said Blom.
 
Ivor Chipkin, from the Public Affairs Research Institute at the University of the Witwatersrand, who presented on behalf of the State Capacity Research Project, said the committee should scrutinise the escalation of Eskom’s coal contract costs.

“Under the Glencore contract the coal contract was R325m per annum, but it increased to R7bn per annum. This is an extraordinary escalation and shows there’s a lack of transparency – and this committee needs to probe it with vigour,” he said.
 
Chipkin said there has been a shift to illegality and clear signs of criminality which affect the broader state and political system in South Africa: “There’s a shadow state that threatens our democracy.”

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