You should not pay for corruption at Eskom

Eskom has applied for a 19.9% price increase from 1 April 2018, but AfriBusiness said it is unfair for South Africans to pay for corrupt activities and maladministration at the company.

Other groups have also written to the National Energy Regulator of South Africa to oppose the large increase.

AfriBusiness pointed out several recent cases where corruption or maladministration probably took place at Eskom:

  • An “illegal payment” to a Gupta-controlled coal company Tegeta Exploration for R659 million.
  • The “unlawful deduction” of a contractual fine transferred to Tegeta through the purchase of the Optimum coal mine.
  • An “unlawful payment” in the form of a long-term bonus to all executive management.
  • A bonus of R711,000 to the now-suspended acting CEO Matshela Koko.
  • The “illegal payment” of R1.6 billion to McKinsey and Trillian Capital regarding an invalid contract that was in contravention of the PFMA.

According to Charles Castle, director of the labour advisory unit at AfriBusiness, private energy providers should also be allowed to enter the market.

“The large-scale fraud that is currently the order of the day in Eskom provides sufficient evidence that the state-owned enterprise is detrimental to the business sector and the public at large,” said Castle.

“Eskom’s management and the parliamentary committee tasked with investigating alleged fraud in Eskom must ensure that the responsible parties are brought to book and that the business sector and public at large are not once again victims of tariff increases.”

Public hearings on Eskom’s proposed tariff increase will take place between 30 October and 16 November.

Now read: Eskom’s R100-million office chair “scandal”

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You should not pay for corruption at Eskom