State capture rot is deep, says Gordhan - but R2.1bn has been recovered so far

21 August 2019 - 18:06 By IAVAN PIJOOS
Public enterprises minister Pravin Gordhan says more than R4.8bn has been lost through state capture.
Public enterprises minister Pravin Gordhan says more than R4.8bn has been lost through state capture.
Image: ESA ALEXANDER

Public enterprises minister Pravin Gordhan says the state has recovered more than R2.1bn from irregular contracts awarded to entities doing business with state-owned enterprises.

Gordhan made the revelation in response to questions by IFP MP Elphas Buthelezi. The IFP's deputy president asked Gordhan about the interventions in place to recover monies lost at state-owned businesses.

Gordhan replied by saying that more than R4.8bn had been lost through state capture.

“The rot within SOCs (state-owned companies) is deep but can be overcome,” he said.

When asked about Eskom, Gordan said McKinsey repaid R902m following a civil claim the power utility instituted against the company. Eskom further recovered R600m illegally paid to Trillian after a Gauteng high court ruling.

Gordhan said the Special Investigating Unit had lodged a court application on behalf of Eskom to set aside the Tegeta Brakfontein coal supply agreement, to the value of R2.7bn.

He said China South Rail (CSR) repaid R618m to Transnet in relation to an irregular prepayment for locomotive maintenance.

“Civil claims have been lodged against former executives to recover losses that were incurred as a result of their irregular conduct,” he said.

Gordan said there was a plan in each of the SOCs to “root out corruption”.

“Each board, supported by other officials, is heavily seized with executing the plan and the plans are beginning to yield tangible results. However, to be frank, overcoming the full impact of state capture and corruption requires vigorous effort and courage from boards and managers,” he said.

Gordhan said SOCs within his department's portfolio were experiencing financial difficulties, but the process to turn SOCs around was ongoing.


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