New documents seen by the Sunday Times reveal how a Gupta-linked company purchased an auditing firm in order to loot from Eskom.
The report stated that Trillian bought an auditing firm – Nkonki – which had existing contracts with the state owned company.
“Trillian and its former owner, Salim Essa, allegedly used Mitesh Patel, a minority shareholder in the black-owned Nkonki auditing firm, as a front,” the report said.
Nkonki had auditing contracts with Transnet and Eskom, and following Trillian’s acquisition, it secured several new contracts with Eskom.
The report noted that several “Gupta supporters” were on Eskom’s board at the time when these contracts were arranged.
The purchase of the auditing firm, and it securing contracts with state entities, was part of the Guptas’ plan to capture SOEs.
Energy regulator Nersa recently granted Eskom a range of price hikes, to be implemented in April, in order to claw back some money for the struggling entity.
The government has promised to plow R23 billion a year into Eskom over the next three years to help the utility meet repayments on its R420 billion debt burden.
Nersa granted the firm the following tariff increases over the next three years:
- 9.41% or allowed revenue of R206.34 billion for 2019/2020;
- 8.10% or allowed revenue of R221.8 billion for 2020/2021;
- 5.83% or allowed revenue of R233.1 billion for 2021/2022.
Eskom pleaded with Nersa, and the country, to allow the price hikes, saying that it was losing R500 million every month.
According to CFO Calib Cassim, Eskom needs R200 billion a year to operate – and that it would lose R2 billion for every 1% of the requested hike that Nersa would not grant it.
He said that unless Eskom can make more money through sales (from higher tariffs), even if it gets another R100 billion bailout from government, it will just get wiped out by debt servicing.
“We’re using one credit card to pay back the other credit card,” Cassim said.
Blackouts in South Africa intensified to a maximum level on Saturday, and will continue into Sunday after the state power utility said it lost additional generation, including electricity imports from Mozambique.
The power cuts, first implemented over the weekend to replenish water and diesel designed for surplus generation, were raised to so-called Stage 4, removing 4,000 megawatts from the grid, Eskom Holdings SOC Ltd said in a statement on Saturday.
Eskom’s operational and financial woes stem from years of mismanagement and massive cost overruns on two new coal-fired power stations that should have been completed in 2015, Bloomberg reported.
The utility is seen as one of the biggest risks to the country’s economy.
The loss of additional capacity included a reduction of electricity imports from neighboring Mozambique.
“The situation remains tight and volatile and we may have to implement further load-shedding should the situation deteriorate,” Eskom said.
“Having lost capacity from Mozambique earlier today, Eskom lost an additional 900 megawatts” due to a line fault, the utility said.
Stage 4 power cuts, the highest degree that has been implemented by the utility, reflects the unreliability of aging coal stations, a reliance on imports and defects in even the newest plants built, Bloomberg said.
Eskom said in a further statement on Sunday that it is continuing with rotational loadshedding to build up necessary water reserves in the pump storage scheme.
“We are currently loadshedding at Stage 2. The stage will shift to Stage 4 from 08h00 till 23h00,” it said.
Date: 16 March 2019
Eskom to loadshed throughout the night and all day on Sunday @CityPowerJhb @eThekwiniM @CityPowerJhb @IOL @CityTshwane @SABCNewsOnline @ewnupdates @TimesLIVE @MangaungCity @CityofCT @News24 pic.twitter.com/FqxaBofAbe
— Eskom Hld SOC Ltd (@Eskom_SA) March 16, 2019
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