Failed Eskom housing project ballooned to R840 million

South Africa’s debt-stricken power utility faces further scrutiny after lawmakers criticized a housing project for workers that cost more than five times the initial estimate and was eventually abandoned.

Planned accommodation at Eskom Holdings SOC Ltd’s Kusile plant ballooned to R840 million ($56.5 million) from an estimated R160 million as a result of “fruitless and wasteful expenditure,” according to parliament’s portfolio committee on public enterprises. The project was scrapped and remains unfinished, while Eskom is alleged to have spent billions of rand on rental accommodation and transportation for its employees, the committee said in a statement.

The failed project is an example of mismanagement at Eskom that’s left it struggling to meet demand for electricity and needing continued bailouts from the government. Kusile, the utility’s newest plant, is behind schedule and over budget.

The loss-making utility relies on government to service R464 billion rand of debt and is at the center of investigations into allegations of widespread corruption during the administration of former president Jacob Zuma.

Eskom had shown a “serious disregard for taxpayer money,” and the matter must be investigated and action taken against all involved, the committee said. The utility’s management is scheduled appear before the lawmakers on Feb. 17.


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Failed Eskom housing project ballooned to R840 million