Eskom inquiry will cover all contracts from 2007

The inquiry into Eskom’s procurement that Public Enterprises Minister Lynne Brown plans to institute will cover all contracts dating back to 2007 including the coal procurement contracts which were the subject of the state of capture report of former public protector Thuli Madonsela.

The inquiry will examine the seven or more investigations into alleged maladministration and corruption in Eskom since 2007 – the year when load-shedding started – including the one by law firm Dentons. These reports were in the past only dealt with by the Eskom board.

The minister’s inquiry will operate alongside the one proposed by Parliament’s portfolio committee on public enterprises.

The Department of Public Enterprises is drawing up the terms of reference for the inquiry which Brown said on Thursday is likely to be undertaken by the Special Investigating Unit (SIU). A retired judge would pull the final report together into clear recommendations to ensure that there were no doubts about the credibility of the investigation.

The department already has a memorandum of agreement with the SIU which obviates the need for putting the inquiry out to tender.
The time frame for the inquiry would be worked out with the SIU which has its own forensic investigators.

Brown said at a media briefing ahead of her budget vote speech in the National Assembly that “we have to confront and overcome the cloud of allegations and counter-allegations about corruption in state owned companies”.

It was important she said to get to the bottom of the allegations of impropriety.

“Eskom’s reputation has been torn to shreds and the company has been reduced to a symbol of malfeasance” Brown told journalists. There had been no prosecutions‚ convictions and legal processes.

She insisted that the inquiry that she planned was not intended as an alternative to the inquiry proposed by Madonsela in her state of capture report as it would be much deeper and broader. “I would like it to be a fair process‚” she said.

The minister noted that Eskom was performing “admirably” compared to two years ago and was expected to make a profit in the 2016/17 financial year. It was making do with a 2.2% tariff hike and still planned to reduce its dependence on state guarantees by R150bn. There had been no electricity disruptions for more than 510 days and there was a generation reserve of 3000-4000MW.

“Eskom is well on track to meet the 80% plant energy availability target‚” Brown said‚ noting that it was currently running at plant energy availability of 77.34% compared to 60% in 2014.

Because of the sluggish economic conditions‚ Transnet had extended the implementation period of its market demand strategy from seven years to 10 years.

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