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By OWN correspondent 
3h ago
Cape Town: Eskom’s coffers will be strengthened this month after the power company reached an agreement to recover more than 1.56 billion rand irregularly paid to service provider ABB.
This comes after the Zurich-based industrial giant ABB was singled out for suspicious payments related to contracts awarded in 2015 related to the control and instrumentation work at the Kusile power plant, worth R $ 14 billion.
An investigation arose as a result of ABB’s voluntary disclosure of alleged collusion with certain Eskom officials to award a contract to ABB in an irregular manner.
The Special Investigation Unit (SIU) launched an investigation following the signing of the 2018 R11 proclamation, which authorizes the agency to investigate allegations of corruption, mismanagement and negligence in Eskom affairs.
Eskom CEO André de Ruyter said on Friday that the reimbursement agreement between ABB, Eskom and the SIU was signed this morning and that the company is expected to receive the proceeds before the end of the year.
“(The amount paid to ABB) was R324 million more than the price offered by the lowest bidder at the time.
“At the time, I was motivated to award the contract to ABB on the basis that ABB could offer a scheduled acceleration, and I think subsequent events have shown that there were other reasons,” De Ruyter told the media.
De Ruyter said the deal amount agreed with ABB includes a variance order worth 800 million rand; the cost associated with the irregular award of contracts due to collusion with certain Eskom officials of R250 million; interest on money from irregular payments of R 380 million and ABB accrued profits of R 160 million.
“We accept that ABB has performed work for which we have received a value and therefore we have not claimed the full amount of the contract. We have tried to reclaim the amount that has been irregularly enriching ABB and therefore it was illegal. “
Another hurdle Eskom faces is that Kusile is still an ongoing project, which is 90% complete, De Ruyter said.
“The fact that Eskom approaches a new contractor with different technology, would likely cause a delay in the commissioning of Kusile, which is already late, for another four years, and will create a real risk of claims from other contractors for time. of rest, amounting to about 1 billion rand. “
De Ruyter said this would increase the risk of loss of cargo.
The CEO said they would approach the Treasury to approve ABB’s continuation of work, on the condition that the company would not make a profit.
De Ruyter said the utility is delighted and sees the move as a continuation of a series of recoveries.
Eskom has already recovered R1.1 billion from McKinsey and R171 million from Deloitte Consulting.
He has also filed a claim for R3.8 billion against members of the Gupta family, Gupta associates, former Eskom executives and a former government minister, as well as a claim for R95 million against PwC.
“We are committed to prosecuting those who tried to get rich illegally at the expense of the taxpayers and consumers of electricity in Eskom and South Africa,” said De Ruyter.
According to De Ruyter, the amount of the settlement with ABB will not significantly affect its financial problems, as it represents only 2.5% of the total debt.
“It is useful to alleviate some of our liquidity constraints, but it is not the solution we are looking for.”
Justice and Correctional Services Minister Ronald Lamola congratulated SIU for a job well done.
He described it as groundbreaking and said it is the largest recovery SIU has made in a single investigation.
“It sends a clear message to the people of our country about the government’s commitment to helping SIU and all other law enforcement agencies do their jobs.”
Public Enterprise Minister Pravin Gordhan said the recoveries and claims are examples of practical actions taken to return money to the coffers, although it takes many years to get started.
Gordhan believes that Eskom and other state entities have been a target of state capture.
He also commended the board and the new Eskom management for their courage, persistence and resilience in bringing the investigation to this point.
SAnews.gov.za
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