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Eskom has announced that it has recovered R1.56 billion from ABB South Africa as a complete settlement for a dispute over corrupt contracts awarded by the utility.
The settlement relates to an overpayment dispute related to a contract that was illegally awarded by corrupt means to work at the Kusile power plant.
ABB was appointed to complete the installation of the instrument and control system for the six units of the power plant.
In a press conference on Friday, December 11, Eskom said that this agreement will be subject to a review by the Superior Court.
“This is the story of money that was stolen from the public by corrupt means, and this is a good day for Eskom and the public,” said Eskom Chairman Malegapuru Makgopa.
This victory for Eskom was the product of an investigation conducted by the Special Investigation Unit (SIU), the Hawks, and several other entities, including the United States Federal Bureau of Investigation (FBI).
The investigation
The SIU has also conducted an investigation into the witnesses involved in the irregular contracts, many of whom are in foreign jurisdictions.
During the course of the investigation, ABB approached the SIU with a settlement offer.
ABB will refund the agreement to Eskom, following its agreement that the agreement was acquired in an irregular and corrupt manner.
In addition to collusion in the award of the contract, certain Eskom officials illegally and fraudulently induced Eskom to pay an estimated 800 million rand to ABB in illegal variance orders, the SIU said.
Civil litigation will also be initiated against the parties involved by SIU and Eskom.
“We are delighted with this agreement, which is an important vindication of the tireless efforts of SIU researchers working closely with the Eskom and ABB teams,” said SIU Director Andy Mothibi.
Mothibi said the SIU has identified the former Eskom executives who were responsible for the corrupt contract award.
“The investigation has shown that they have since left the organization,” Mothibi said.
“But as I pointed out to my colleagues, the resignation only ends the employer-employee relationship. We will pursue them if there is any indication that they have caused damage to Eskom. “
CEO responds
Eskom CEO André De Ruyter said the company is very satisfied with the recovery of funds.
“Eskom is expected to receive the proceeds of this payment before the end of the calendar year,” he said.
“To avoid lengthy and protracted litigation, Eskom and SIU agreed that the settlement amount is a fair and reasonable reflection of the damages that Eskom and, incidentally, the involvement of the people of South Africa, suffered as a result of this illegal contract. “
De Ruyter said Eskom will continue to work with ABB to complete the work at Kusile to avoid further delays, on the condition that ABB will not capitalize on the effort.
“We are satisfied with this result. It is the continuation of a long series of recoveries, ”he said.
“As the leadership and board of Eskom, we are committed to prosecuting those who tried to enrich themselves illegally at the expense of Eskom and the South African taxpayer.”
De Ruyter pointed out that the total amount paid to Eskom by ABB only represents 0.25% of Eskom’s total debt and therefore will not make a significant difference to settle it.
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