Rampant corruption at Kusile – Contractors paid school fees of contract boss’ daughter

More corruption has surfaced in Bowmans’ investigation into the construction of Eskom’s Kusile power station, reports the Sunday Times.

According to an investigation by law firm Bowmans, two contractors paid a combined R46,000 towards the school fees of Dianah Motlou’s daughter.

An email conversation between Motlou – who was in charge of contracts at Kusile – and former Eskom senior capital contracts manager France Hlakudi showed that the latter had proof of the payment of R26,000 paid by Tubular Construction Projects towards Motlou’s daughter’s school fees.

On 2 December 2015 Hlakudi emailed Motlou: “Hi Dianah, Have proof of payment but people are too many at the printer … Will wait a bit and send to you.”

The investigators then found the proof of payment for R26,000 to the school on Hlakudi’s computer.

Kusile Power Station
Kusile Power Station

According to Bowmans, Babinatlou paid the remaining R20,000 into the bank account of Motlou’s daughter “as a favour for Mr Hlakudi”.

“Ms Motlou was a close associate of Mr France Hlakudi, former senior manager … who was involved in numerous illegal activities,” said Bowmans.

“She conducted private business activities during Eskom time and using Eskom resources without the required approval.”

In response to these allegations, Hlakudi said he was aware of Bowmans’ report.

“To the best of my recollection it was used by Eskom to crucify Ms Dianah Motlou without giving her a chance to have legal representation in the hearing,” said Hlakudi.

“There are always two sides to the story.”

Kusile corruption carnage

This is just one of many revelations to come out of the Bowmans investigation, which was initially commissioned by former Eskom CEO Phakamani Hadebe in 2018.

The report found that the construction of Kusile has been ravaged by corrupt contracts and design defects, which resulted in delays spanning several years and R160 billion in increased construction costs.

The project began in 2008 and was meant to be complete by 2014. Instead, only one of Kusile’s 6 units was in commercial operation by 2019.

Energy expert Ted Blom has blamed the issues relating to Kusile’s performance on the corrupt switching of two important tenders.

Ted Blom
Ted Blom

“The tender contracts for Medupi and Kusile were corrupt from day one,” Blom said.

“Hitachi tendered for the turbines and are well-known worldwide for turbine execution, while Alstom tendered for the boilers.”

“The powers that be at Eskom swapped the tender offers and Hitachi ended up with what they didn’t tender for – the boilers – and Alstom ended up with the turbines,” Blom said.

Blom alleges that the reason for this switch was that the boiler tender was the larger of the two, and the ANC’s investment company, Chancellor House, owned shares in Hitachi Power Africa.

Other revelations unearthed by Bowmans’ investigation into the Kusile power plant include:

  • Contractor Stefanutti Stocks and Basil Read (SSBR) had its initial R1.79-billion Kusile construction contract hiked by a further R903 million through irregular additions to the required work.
  • Former Eskom senior manager for Capital Contracts France Hlakudi helped secure a R100,000 donation paid by SSBR to a foundation linked to Jacob Zuma’s family. Beyond a launch event, there is no proof that the foundation had any further activities.
  • Eskom bosses and contractor representatives colluded to initiate a R15-million productivity study on the Kusile project. There is no evidence that this study was conducted.
  • Former Eskom group executive for group capital Abram Masango had a personal interest in inflated furniture purchases worth R22 million.

The last of these revelations involved purchased furniture which was to be used at the Wilge Residential Development – a housing complex intended for workers at Kusile.

Pricing for this furniture included:

  • R18,000 for a pool table typically priced at R3,500, a 425% mark-up.
  • R2,900 for desks currently priced at R499, a 481% mark-up.
  • R4,400 for two-seater couches worth R500, a mark-up of 780%.
Wilge Residential Development
Wilge Residential Development

Now read: 3,513GWh – worth R4.95 billion – stolen from Eskom in six months

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Rampant corruption at Kusile – Contractors paid school fees of contract boss’ daughter