Eskom contractor ABB agrees to pay back R1.6bn for 'over-payments'

11 December 2020 - 14:54 By naledi shange
Construction company ABB SA has committed to pay back nearly R1.6bn to Eskom.
Construction company ABB SA has committed to pay back nearly R1.6bn to Eskom.

Construction company ABB has committed to pay back nearly R1.6bn to Eskom for “over-payments” made on contracts with the power utility.

The payment will be made within 14 days of the settlement agreement being signed.

Interim Eskom chairperson Malegapuru Makgoba said this amount was subject to court approval.

“This is the beginning of the story of recovering money stolen through corrupt means,” said Makgoba.

The announcement was made at a joint briefing on Friday afternoon.

According to advocate Andy Mothibi of the Special Investigating Unit (SIU), ABB co-operated fully with the unit's investigation into an irregular tender it received for the construction of Eskom’s Kusile’s power plant.

Mothibi said when they approached ABB with allegations about the company receiving the multibillion-rand tender contract irregularly, ABB conducted its own internal investigations into the matter.

Eskom and the Special Investigations Unit (SIU) announced a historic payment agreement between contractor ABB and the power utility during a media briefing on December 11 2020. The power utility will receive close to R1.6bn in "over-payments" stemming from an irregular tender awarded to the construction company.

ABB returned to the SIU and said it had found evidence of corruption in the manner in which the company had secured the contract with Eskom.

Mothibi said during their investigation, the SIU roped in assistance from the FBI (Federal Bureau of Investigation in the US), which was integral because some witnesses allegedly connected to the dubious contract were abroad.

Following revelations that there was corrupt activity, Mothibi said ABB again approached the SIU with an offer of settlement. It was eventually agreed the amount owed to Eskom was almost R1.6bn for over-payments.

“We are thrilled to see this kind of recovery,” Mothibi said.

Meanwhile, criminal investigations are under way.

The SIU has successfully identified who within Eskom was possibly behind the awarding of the dubious contract.

Mothibi said those responsible had since left the company, but stressed “resignation only terminates the employer-employee relationship” and did not absolve anyone from criminal liability.

He said these people would be brought to book to account legally.

At the briefing, it was also revealed that a company linked to the stepdaughter of former Eskom CEO Matshela Koko was involved in the irregular and fraudulent contract awarded to ABB SA.

While the SIU was reluctant to reveal the names of Eskom and ABB SA officials who were allegedly linked to the irregular contract, Eskom group chief executive André de Ruyter revealed Impulse International was a subcontractor to ABB.

Investigations were continuing and no-one had been criminally charged for the multibillion-rand contract unlawfully awarded to the company.

De Ruyter said, despite the irregularities and criminal activity that went into ABB securing the contract, the parastatal would continue working with ABB on completion of the Kusile project. However, he said ABB would no longer be making a profit from the contract.

He it was in the best interest of the country to continue the work with ABB because removing them from the project would delay completion of the much-needed power plant, and could also cost Eskom more money.

De Ruyter said it was “impractical to blacklist the company”, and bringing in a new contractor would mean a four-year delay to getting the plant operational. This would, in turn, increase the risk of load-shedding.

Meanwhile, on Impulse’s role, it came to light in 2017 that Koko had personally signed a deviation order that allowed his step-daughter’s company Impulse International to score a R66m deal from Eskom without going out to tender.

His stepdaughter Koketso Choma‚ who was living with him at the time‚ became a director and shareholder of Impulse shortly after the contract was awarded.

Choma initially received a 25% stake hidden in a trust‚ which was later increased to 35%.

Eskom later awarded Impulse nine contracts worth R380m and sub-contracts worth another R260m.