South Africa: State Capture Inquiry Shines Spotlight On Eskom

20 February 2019

The Zondo commission's legal team, led by advocate Vincent Maleka, on Wednesday set the scene about the alleged state capture of state-owned entities (SOE's) by shining the spotlight on power utility Eskom.

Maleka pointed to three reports that dealt with Eskom.

"So chair, you will see why it becomes important for the commission to deal with questions of allegations dealing with state capture relating to Eskom, due to its centrality to the sector, budget and procurement opportunities," Maleka said.

He said this would be done through gap analysis, which would help avoid repeating investigations that had already been conducted into the power utility.

"The first gap relates to interrogation of those findings previously made on Eskom by bodies. We believe that they require further analysis, so they can stand the test of time or avoid any form of challenge.

"The second form of gap analysis relates to interactions affected by suspicious conduct relating to state capture, such as fraud and corruption that have not been previously investigated by any previous person or body," Maleka further explained.

These reports consist of investigations conducted into the power utility prior to the establishment of the commission of inquiry into state capture.

Maleka highlighted a National Energy Regulator of South Africa (Nersa) report, a Dentons report and the "genesis of the commission" being the State Capture Report.

The purpose of the Nersa report was to look at load shedding during the period between November 1, 2007, and January 31, 2008, and provide reasons for the electricity supply shortage.

Maleka pointed out that the reports all showed up a gap that needed to be closed by the commission.

'Problems still occur'

"A request was made by Nersa that Eskom should do certain things to prioritise corrective measures to avoid these consequences, and some of them were directed at specific departments within Eskom, like primary energy procurement

"Yet problems still occur. Why?" Maleka asked.

Maleka further highlighted a Dentons report dated July 2, 2015, which he said provided yet another gap for the commission to close. Dentons was tasked with investigating the status of the business, as well as challenges experienced by Eskom, but never completed the investigation.

"Dentons was requested to present a detailed presentation to the board. It was delivered on June 25/26, 2015, which was followed by a draft preliminary report. Investigations ceased shortly after June 11, 2015.

Lastly, the State of Capture report by former Public Protector Thuli Madonsela released in October 2016 leaves yet another gap for the commission - the testimony of former mineral resources, minister Mosebenzi Zwane on his trip to Zurich, Switzerland.

"The public protector in the report says that Minister Zwane needs to be interviewed for his version of events, as it needs to be further probed as to whether it amounted to wasteful expenditure or not.

"This gap needs to be further interrogated by the commission," Maleka added.

Eskom board chairperson Jabu Mabuza will be the first witness to testify about the power utility on Friday.

The inquiry continues.


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