Eskom paid R2.6 million for a R60,000 container that it couldn’t even use
Power utility Eskom has welcomed the sentencing of a supplier who defrauded the company of almost R3 million by inflating invoices for containers.
According to the group, the supplier in question had invoiced to provide the group with three containers valued at R60,000 each (ie, R180,000).
However, only one container was ultimately delivered and failed to meet Eskom’s specifications. Through inflated invoices, the supplier managed to defraud the utility of R2.6 million (1,344% inflated).
The fraud took place at the Tutuka Power Station in 2020. Eskom’s investigations uncovered a syndicate that operated the scheme.
The director and majority shareholder in one of the implicated companies, was sentenced to 12 years in prison for fraud, suspended for five years.
The supplier was also sentenced to four years in prison for money laundering, suspending for give years, and ordered to repay Eskom R2.595 million.
Eskom has a long history with paying over-inflated invoices.
Over the years, it has emerged that the group approved paying R238,000 for a mop and R80,000 for knee guards.
Some of the other inflated prices it has paid include:
- R26 for a single-ply roll of toilet paper which cost R5 – a 420% markup.
- R51 for a black refuse bag, which retailed for R2.99.
- A mop for R238,000.
- R80,000 for knee pads which cost R150 at Builders Warehouse.
- One kneepad supplier paid R4,025 and charged Eskom R934,950.
The group manages a procurement budget of tens of billions of rands, making it ripe for fraudulent procurement practices and corruption.
“Our commitment to eliminating corruption remains unwavering and these developments send a
clear message: fraud and corruption will not be tolerated,” Eskom said.
The utility stressed that the “vast majority” of Eskom employees act with integrity and dedication, but those who do not would be pursued with all available resources.
“We will pursue those who betray the organisation and the country with our law enforcement partners and seek prosecutions wherever possible,” said Eskom Group Chief Executive, Dan Marokane.
To strengthen governance and accelerate investigations, Eskom has consolidated its forensic, security, and investigative functions into the Group Investigations and Security (GIS) Division, which reports directly to the Group Chief Executive.
“Working closely with the NATJOINTS Energy Safety and Security Committee, GIS ensures swift action against fraud and corruption, protecting Eskom’s assets and maintaining public trust,” it said.
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