Scopa heard about collusion between senior Eskom executives and state capture actors in the awarding of coal supply contracts. Picture: Oupa Mokoena/African News Agency (ANA)
IN A damning virtual briefing to the Standing Committee on Public Accounts (SCOPA) this week, the Special Investigating Unit (SIU) laid bare the extent of corruption, maladministration, and systemic failures at Eskom, South Africa’s embattled power utility.
The revelations—which included collusion with state capture actors, procurement fraud, and widespread conflicts of interest—have raised urgent questions about accountability and the recovery of billions of rand lost to corruption.
The SIU’s investigation into the state-owned power utility has uncovered a labyrinth of corruption involving senior executives, employees, and external vendors. According to Advocate Andy Mothibi, the head of the SIU, the unit has identified 5 464 Eskom employees who failed to complete declaration of interest forms, with 334 employees found to have direct interests in companies doing business with the utility.
Of these, 194 cases have been referred for further investigation, while 11 employees have already faced disciplinary action.
“The level of corruption at Eskom is staggering,” the DA’s Patrick Atkinson said. “It’s clear that this is not just a case of a few bad apples, but a systemic failure that has allowed theft to occur in plain sight.”
One of the most alarming findings was the collusion between senior Eskom executives and state capture actors in the awarding of coal supply contracts. The SIU revealed that senior executives facilitated unlawful agreements with Tegeta Exploration and Resources, a company linked to the Gupta family, for the supply of coal to Eskom’s Majuba, Optimum, and Koornfontein power stations.
These contracts, valued at over R7.5 billion, were found to be inconsistent with Section 217 of the Constitution, which mandates fair, equitable, and competitive procurement processes.
Mothibi detailed how Eskom executives manipulated procurement processes, often using “emergency” provisions to bypass normal tendering procedures. “These emergency purchases were entered into at inflated prices, and the higher prices remained in the system even after the emergency had passed,” he said. “This was a deliberate scheme to syphon money from Eskom.”
The SIU has initiated civil proceedings to recover R3.8bn in losses from these contracts, with criminal matters being handled by the National Prosecuting Authority (NPA).
The SIU also uncovered widespread procurement fraud, with employees and vendors colluding to manipulate Eskom’s informal tendering processes. “We identified a direct link of money flowing from these companies through a network of entities to Eskom employees,” Mothibi said.
To date, 45 vendors have been blocked, and 35 employees have been identified as having received more than R180 million in kickbacks.
One particularly egregious case involved Petros Mazibuko, an Eskom employee who had an undisclosed interest in a supplier, Commodity Logistix Managers. Mazibuko received payments from the supplier through a network of entities linked to his family. He was dismissed following a disciplinary hearing, and the SIU successfully froze his bank accounts to recover the illicit profits.
The investigation also revealed abuses in Eskom’s security contracts, where emergency provisions were exploited to award contracts to unqualified companies. These companies then subcontracted 90% of the work to third parties, often at inflated costs. “Employees deliberately created emergencies to justify these contracts,” forensic investigation specialist at the SIU, Viven Govender, said. “This is not just corruption; it is sabotage.”
The SIU’s findings paint a picture of an organisation riddled with systemic failures. Eskom’s internal controls were described as “broken”, with procurement processes easily manipulated and employees routinely flouting conflict of interest policies.
The SIU has made several recommendations to address these issues, including improved transparency in procurement, continuous monitoring of high-risk officials, and the implementation of lifestyle audits.
“Thorough vetting of officials upon entering Eskom is not enough,” Mothibi said. “We need contractual terms that allow for access to employees’ personal information, including bank accounts and communications, to ensure accountability.”
Despite the SIU’s efforts, holding perpetrators accountable remains a challenge. Many employees implicated in corruption resigned before disciplinary action could be taken, while others have used legal tactics to delay proceedings. For example, Thulani Zulu, an Eskom employee who allegedly received R2.8m in kickbacks, resigned immediately after being interviewed by the SIU. His case is still pending in court, with judgment reserved since 2022.
“The delays in the judicial process are frustrating,” Scopa chairperson Songezo Zibi said. “We need to ensure that those who have stolen from the people of South Africa are held accountable without unnecessary delays.”
The SIU has recommended that several companies, including ABB and SAP, be blacklisted for their involvement in corrupt activities. However, the process of blacklisting is complex, particularly for companies that provide critical services to Eskom. “We cannot simply remove these companies without considering the operational implications,” Mothibi said. “But we must also send a strong message that corruption will not be tolerated.”
The SIU has successfully recovered R570m from SAP, which was found to have unlawfully awarded contracts for cloud computing and software licensing. Similarly, ABB has agreed to repay R2.5bn in punitive reparations for its role in corrupt contracts at Eskom.
The revelations have sparked calls for urgent action to prevent further corruption at Eskom. Veronica Mente-Nkuna emphasised the need for a comprehensive prevention plan. “We cannot allow this level of theft to continue,” she said. “We need to ensure that those responsible are blacklisted and that the system is cleansed of corrupt officials.”
Mothibi echoed this sentiment, stating that the SIU was working with Eskom to develop a prevention framework. “We need to address the vulnerabilities that have allowed corruption to flourish,” he said. “This includes improving internal controls, implementing lifestyle audits, and ensuring that procurement processes are transparent and competitive.”
The SIU also highlighted several other areas of concern, including:
The SIU has also been conducting lifestyle audits on high-risk employees, with 34 matters referred for further investigation. “We have started checking over 500 laptops of senior management and procurement officials to identify any illicit activities,” Govender said. The SIU has also received 29 whistle-blower cases, of which 11 have been finalised and referred to Eskom for disciplinary action.
The SIU’s briefing to Sopa has laid bare the extent of corruption at Eskom, revealing a web of collusion, fraud, and systemic failures that have cost the South African public billions of rand.
While the SIU has made significant progress in uncovering these crimes, the road to accountability and recovery remains long. As Mothibi aptly put it: “The fight against corruption is not just about recovering funds; it is about restoring trust in our public institutions and ensuring that those who steal from the people are held accountable.”
South Africa will be watching closely as Eskom and the government take the necessary steps to address these issues and prevent future corruption. The stakes could not be higher, as the stability of the country’s energy supply—and its economy—depends on it.