De Ruyter highlights strides Eskom is making in recovering looted billions

04 December 2020 - 10:53
Eskom CEO Andre de Ruyter says the power utility is in the process of recovering billions from companies involved in state capture.
Eskom CEO Andre de Ruyter says the power utility is in the process of recovering billions from companies involved in state capture.
Image: REUTERS/Sumaya Hisham

Eskom CEO Andre de Ruyter said the power utility had recovered more than R1bn from companies that played a role in state capture.

The power utility was also making headway in recovering more money from companies and individuals fingered in corruption, De Ruyter said.

“In exposing the malfeasance that has characterised Eskom for so long, we have been able to recover R1.1bn from McKinsey. We have recovered in excess of R150m from Deloitte consulting,” said De Ruyter at the SA National Editors’ Forum (Sanef) fundraising event on Friday.

He said Eskom was in the process of recovering more than R700m from Trillian and from PwC Consulting.

“We’ve also gone after the individuals who have sought to enrich themselves at the expense of SA, of the taxpayer and of electricity consumers, by launching in conjunction with the SIU a R3.8bn claim against the Guptas, Salim Essa, Mosebenzi Zwane and former Eskom executives including former CEOs.”

“The principle is not so much that we will recover all the money — much of the money I’m sure has been stashed safely away in strange jurisdictions around the world — but we understand that without holding people to account, you open the doors to a free-for-all,” De Ruyter said.

The power utility, he said, had parted ways with no fewer than 30 senior executives and managers.

“We are continuing to investigate and register cases to hold those to account. The sad part is that as a consequence of state capture, such an important institution as Eskom has been hollowed out to a very large extent and it’s not only reflected in the poor maintenance of our power stations, which we are recovering. It’s not only reflected in how we have handled billing of municipalities, but it’s also in systems and processes in our very culture as an organisation.

Rebuilding the ethos that made Eskom the top global utility in the world as recently as 2001 - that is a mountain we have to climb.
Andre de Ruyter

“Rebuilding the ethos that made Eskom the top global utility in the world as recently as 2001 — that is a mountain we have to climb,” he said.

Political leadership should also be held to account, De Ruyter said.

He said he had not experienced any political interference, particularly from public enterprises minister Pravin Gordhan.

“I think I have been given a free hand to do what I think is best from a business perspective, in conjunction with the Eskom board.

“There is no pressure on me to award a contract to a particular vendor. There is no pressure on me to appoint particular people in particular positions and that I think is crucial in restoring trust.”

With Eskom’s gross debt approaching half a trillion rand, De Ruyter said the utility posed a systemic risk to the country’s economy.

“We need to find a way of making Eskom financially sustainable and that is a challenge we are engaged with now.

“We are grateful for the fiscal support we receive from National Treasury. Up until 2026, we anticipate that we will be receiving about R121bn. The sad part of this fiscal support is that it’s money that is diverted from other key national priorities. We need to wean ourselves off taxpayers’ support as soon as possible.”

The best way to move away from taxpayers’ support, De Ruyter said, was for Eskom to charge cost-effective tariffs.

“No business can survive by selling its product below its cost of production.”

De Ruyter also announced that Eskom was on Friday on its 40th day of not burning any diesel to support its system.

“This is at the same time as we have taken out for long-term maintenance — the so-called reliability maintenance programme — 11 units, which is equivalent to two major power stations that we have taken off the grid that we are now maintaining.

“For us to be able to keep the country’s lights on without using diesel while doing maintenance, I think is good.”

He said diesel cost Eskom R10m per hour.

“It speaks to the need for us to fix the operational integrity of Eskom.”

This included getting Medupi and Kusile functioning well, he said.

“We are making good progress on that. We now know what the design defects are that have bedevilled those two plants. We have implemented modifications on four of the units at Medupi and we are now at a point where those units can operate to their full capacity.”

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