Eskom is getting fleeced

Eskom’s long-standing struggle with corruption has once again come under the spotlight as the Special Investigating Unit (SIU) uncovered a scheme involving employees manipulating procurement processes to siphon as much as R1 billion.

According to SIU head Advocate Andy Mothibi, the fraud was orchestrated by deliberately splitting contracts into smaller values, each under R1 million.

This allowed them to avoid strict checks that are usually in place for bigger contracts.

Addressing the Standing Committee on Public Accounts (Scopa), Mothibi spoke to the Standing Committee on Public Accounts (Scopa) and explained how Eskom workers took advantage of “low-value” contracts at some of the biggest power stations in the country.

These contracts were meant to speed up purchasing for urgent needs, but instead, corrupt employees used them to their advantage.

Employees reportedly conducted transactions outside of normal working hours—before 07:00 in the morning or after 18:00 at night—deliberately avoiding detection while processing fraudulent purchase orders.

At Kusile power station alone, such after-hours transactions amounted to over R500 million in recent years.

The SIU investigation has been carried out in three stages. So far, they have looked into R3.5 billion worth of purchase orders at 15 power stations.

The final stage, still in progress, is investigating another R700 million in potentially fraudulent transactions.

The investigation has already identified 334 Eskom employees with financial ties to vendors, along with 5,464 employees who failed to declare conflicts of interest.

The corruption extended beyond Eskom staff, involving family members and external networks used to launder stolen funds.

Senior officials were also implicated in deliberately enabling fraudulent claims to be paid out in exchange for kickbacks.

In response, the SIU has made 34 disciplinary referrals, split equally between current and former Eskom employees.

Additionally, over 100 referrals have been submitted to the National Prosecuting Authority (NPA), the Asset Forfeiture Unit, and the South African Revenue Service (SARS).

A major concern

This latest scandal adds to the already troubling history of entrenched corruption at Eskom, which has been struggling with internal fraud for years.

Eskom’s corruption woes are not new.

The utility’s annual financial results in December revealed a major security breach in its online vending system, which was exploited to generate illegal electricity tokens in bulk.

Investigators linked the breach to individuals with privileged access to Eskom’s IT systems.

This fraud, along with illegal connections and other thefts, contributed to a staggering revenue loss of R23 billion.

Additionally, former Eskom CEO Andre de Ruyter previously made damning allegations about the extent of corruption and maladministration at Eskom during his tenure from January 2020 to December 2022.

De Ruyter estimated that Eskom was losing approximately R1 billion every month due to corruption—a figure he described as conservative.

Following an explosive interview in which he outlined these concerns, he resigned from his position and later authored a book detailing his experiences.

He also commissioned a private investigation into Eskom’s corruption, which cost R17.1 million and allegedly uncovered evidence of systemic fraud.

Despite De Ruyter’s findings, Eskom’s latest annual report states that the utility does not have access to the private intelligence dossiers resulting from his investigation.

The board subsequently appointed an independent legal firm to try to obtain these reports, but the details remain unclear.

While De Ruyter’s claims are still under investigation, current Eskom board chair Mteto Nyati recently stated in an interview with the Centre for Development and Enterprise (CDE) that the board has not found evidence of large-scale syndicates operating within Eskom.

Instead, they have discovered corrupt individuals colluding with external contractors.

He emphasised that generalising all Eskom employees as corrupt is unfair, as the majority are honest workers committed to the utility’s mission.

Nyati stressed that tackling corruption remains a top priority for Eskom’s leadership. The board has established a project management unit within the Office of the CEO to drive accountability and oversee collaboration with investigative agencies such as the SIU and law enforcement.