Former acting Eskom CEO Matshela Koko has been accused of promising a Swiss-based engineering giant R6.5bn in future contracts if it subcontracted work on Kusile power station to Impulse International, a company partially owned by his stepdaughter, Koketso Choma.
According to a report by the Sunday Times, the global firm has blown the whistle in reports provided to the Special Investigation Unit (SIU), giving details on its dealings with Koko and Impulse.
Multi-national electrical engineering firm Asea Brown Boveri (ABB) was awarded a R2.2bn control and instrumentation contract for Kusile in 2015, and subsequently awarded Impulse R800m in work – despite the fact that Impulse failed ABB's tests for subcontractor appointments twice and did not qualify to do the work, the newspaper said.
Impulse was tested twice, first scoring 59% and then 43%, but was hired. Several months after starting the work, Impulse achieved a pass score of 94%.
Impulse was given a R25m contract without the necessary approvals, and Eskom subsequently approved several variation orders, bumping up the contract's value by hundreds of millions of rands.
According to the Sunday Times report, Koko was personally involved in price negotiations, sometimes approving contract prices prior to the submission of proposals.
Project managers who questioned the costs or processes were reportedly "removed" from projects.
According to Eskom, ABB secured a further 46 contracts after subcontracting Impulse, worth a total of R1.08bn.
The SIU confirmed its investigation and said ABB could be facing criminal investigations in SA and abroad, the newspaper said. ABB had approached the SIU and US authorities with information in 2018 in a bid to ward off criminal investigations for, among other things, money-laundering, corruption, fraud and organised crime, it added.
According to the documents by ABB, Koko liaised with an ABB employee known as Sunil Vip to arrange kickbacks. The documents include emails between ABB and Eskom senior executives, as well as financials and integrity reports.
ABB says that according to Vip, Koko undertook to ensure ABB would be lined up for future contracts worth R6.5bn not only at Kusile, but also at Kendal, Matla and Tutuka.
'A face on corruption'
Koko, for his part, called ABB's allegations "ridiculous" and said Eskom was under pressure to put "a face on corruption".
In response to a query from Fin24, Eskom said it was co-operating with the SIU, the Hawks and other law enforcement agencies, as well as the Zondo commission of inquiry into state capture, who are investigating suspected irregularities regarding contracts the power utility has entered into in recent years. It did not specify which contracts.
It was not at liberty to give detailed comment outside of formal processes, it said.
The embattled power utility said on Thursday that its board would decide how to address its financial shortfall, after the National Energy Regulator granted lower electricity tariffs than it applied for over the next three financial years.
In a statement, the state-owned company said it was also awaiting the reason for the decision by the regulator to disallow R102bn in revenue requested over the next three financial years.
The National Energy Regulator of South Africa had announced earlier that electricity prices will rise by 9.41% in 2019/2020, 8.1% in 2020/2021 and 5.2% in 2021/2022.