An oil blending and storage company secured deals to supply South Africa\u2019s state power utility with fuel oil worth more than R15 billion ($1 billion) at inflated prices by paying inducements, including donations to the ruling party, a forensic investigation has found.<\/p>\n
Econ Oil & Energy allegedly won the contracts with the help of Thandi Marah, then senior manager of business enablement at Eskom, who interfered in the tender processes, said legal firm Bowmans, which Eskom commissioned to conduct the probe.<\/p>\n
A copy of its final report dated 12 October last year was seen by Bloomberg and confirmed by Eskom.<\/p>\n
In return Nothemba Mlonzi, Econ Oil\u2019s sole director, made payments requested by Marah, including a R100,000 contribution to the ruling African National Congress\u2019s 2014 election campaign, Bowmans said.<\/p>\n
A separate presentation made in February by Nerina Otto, Eskom\u2019s Acting Group Executive for Legal and Compliance, the authenticity of which was also confirmed by Eskom, made the same finding and alleges that Econ Oil overcharged the utility by R1.2 billion between 2012 and 2016.<\/p>\n
\u201cBowmans provided Eskom with a report that found there to be \u2018a reasonable basis to suspect that Econ Oil\u2019s conduct breached internal Eskom policies,\u2019 and that a corrupt relationship existed between Econ Oil and an Eskom senior manager,\u201d the utility said in a response to queries.<\/p>\n
Eskom has been at the heart of a judicial probe into allegations of widespread looting of South African state-owned companies, mainly by people linked to the ANC.<\/p>\n
The company is struggling to service its R464 billion debt and has subjected the country to intermittent power outages since late 2005 because it hasn\u2019t properly maintained its plants, stifling economic growth and investment in industrial and mining projects.<\/p>\n
The finalisation of the Bowmans probe followed Eskom\u2019s decision in July last year to cancel a contract that would have seen it continue to buy fuel from Econ Oil.<\/p>\n
Marah was suspended in December 2018 and took early retirement at the end of January 2019, according to the utility.<\/p>\n
Marah said she wasn\u2019t aware of the Bowmans report and declined to comment further. Bowmans didn\u2019t respond to questions and Mlonzi wouldn\u2019t immediately comment.<\/p>\n
Pule Mabe, a spokesman for the ANC, didn\u2019t answer calls to his mobile phone or respond to a text message.<\/p>\n
Bowmans identified the ANC\u2019s Liliesleaf branch in Johannesburg as the recipient of the donation.<\/p>\n
Marah was deputy chairwoman of the branch in 2014, according to Pat Sibiya, who served as its secretary at the time and said he couldn\u2019t immediately recall the payment.<\/p>\n
Sibiya\u2019s name wasn\u2019t mentioned in the report or in Otto\u2019s presentation and he said he wasn\u2019t involved in fundraising.<\/p>\n
Allegations denied<\/strong><\/p>\n Otto said in her presentation that Mlonzi denied the allegations in a response she made to Eskom on 24 February and undertook to prepare a sworn affidavit to give her side of the story. The affidavit has yet to be submitted.<\/p>\n \u201cEskom has for a number of years been plagued by corruption, poor governance and unlawful contracts concluded to the detriment of Eskom and, by necessary implication, South Africa,\u201d Andre de Ruyter, the utility\u2019s group chief executive, said in a 29 March affidavit to a parliamentary committee.<\/p>\n De Ruyter gave the dispute with Econ Oil as an example, and disclosed that Eskom has taken action against several other suppliers, service providers and 12 individuals, including former executives, who overcharged or defrauded the utility.<\/p>\n Bowman\u2019s report alleges that Mlonzi and Marah pressured Eskom staff to disclose other fuel suppliers\u2019 prices to Econ Oil ahead of the conclusion of tenders.<\/p>\n It also details a request Marah made to Mlonzi to make a payment to a women\u2019s charity, and says Mlonzi paid for Marah and other Eskom staff to attend an ANC fund-raising dinner, where the price of a table ranged from R150,000 to R700,000.<\/p>\n Eskom said it has temporarily suspended Econ Oil as a supplier to allow it to make further responses over the next six months.<\/p>\n If Eskom decides not to lift the suspension, it will deregister Econ Oil from its supplier database for 10 years and notify the National Treasury so it can \u201cblacklist Econ Oil from contracting with other organs of state,\u201d the utility said.<\/p>\n An attempt by Econ Oil to interdict Eskom from removing the company from its supplier database failed in court on 23 February, according to Otto\u2019s presentation.<\/p>\n
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