An investigative report from a professional auditing firm Deloitte, has revealed that the constant Eskom load shedding experienced in the country was part of a get-rich-quick tactic used by Eskom’s top manager.
Deloitte reported its findings that the country’s mass blackouts and Eskom load shedding was engineered by a senior manager of the power utility as part of his plan to acquire wealth through irregular contracts.
The report by Deloitte which investigated alleged dodgy dealings within the power utility during the blackout period, prompted an investigation by the police’s Special Investigating Unit which was handed over to President Jacob Zuma in 2014.
The report claims that Koos Jordaan, Eskom manager who was “given the job of buying more than R10bn of emergency coal during the 2008 power crisis negotiated several ‘irregular’ contracts – including one with a friend – and resigned shortly after an investigation was launched”.
This comes after a law firm Dentons’ report, released in early February, mentioned the possibility of criminal activity related to the emergency procurement of “blackout” coal under the watch of lead procurement negotiator, Koos Jordaan.
“It would appear that Mr Jordaan, and other Eskom employees, circumvented the prescribed Eskom tender policy and procedure by appointing suppliers under the emergency mandate when, in fact, these services did not relate to the emergency period and should have been dealt with under the normal Eskom procurement policies and procedures,” the report said.
“From the interviews conducted, it appears that the [2008 Eskom load shedding] was not managed in the best interest of Eskom and resulted in fruitless and wasteful expenditure being incurred,” it further stated, giving details of numerous irregularities that helps to strengthen speculations that the 2008 blackout emergency, which cost South Africa an estimated R300bn, was engineered to benefit favoured companies.
Constant power shortages and Eskom load shedding have been pointed as part of the major challenges the nation’s economy suffers as the country’s small and medium enterprises rely on power supply for their daily activities.
Eskom spokesperson Khulu Phasiwe told Fin24 on Wednesday that Eskom should not be criticised for conducting internal investigations and acting on the recommendations. He said the investigation was conducted following concerns over activities going on inside the power utility.
“As a matter of course to ensure sustainability of the business, coupled with compliance with the laws of the country, Eskom ensured the implementation of all recommendations made by the investigative bodies,” he said.
“Eskom and SIU are in contact with regard to the processing of the SIU report. Dentons’ fact-finding exercise was not related to any previous inquiry. It stood on its own specific terms of reference,” Phasiwe said, pointing out the need for people to understand that the investigations, including the three-year partnership with the SIU, were initiated by Eskom in an effort to deal with irregular conducts by some of its employees.
Meanwhile, a criminal case was opened against Jordaan, state police confirmed. Criminal dockets are usually submitted to the National Prosecuting Authority for a decision on whether to prosecute but the NPA’s Gauteng spokesman said there was no trace of such a docket.
Jordaan who is now a senior executive of a private coal company said he had done nothing wrong.
“Allegations in the Deloitte report were unproved; I have nothing to hide; I did [my] best. my utmost best. I think I did a very good job,” he said adding that he concluded not a single transaction on his own.
“Everything was done in formal structures and formal committees. Nobody received any advantage whatsoever. There was sign-off by all relevant parties and everything was done by the book,” Jordaan said.