Among the startling allegations levelled against Eskom CEO Andre de Ruyter is that he misled the media about halting the purchase of a single wooden mop at R238,000 and that he protected colleagues implicated in project management contracts at Kusile power station that escalated from R100m in 2007 to R12bn and counting.
These allegations emerged as the very public spat between De Ruyter and his subordinate, suspended Eskom chief procurement officer Solly Tshitangano, caught the attention of parliament this week.
Tshitangano, who was suspended from Eskom pending a disciplinary hearing into his failure to meet performance targets, petitioned MPs in a letter to investigate a host of irregularities he alleges De Ruyter has committed or is attempting to cover up.
The announcement of his suspension came after the Sunday Times reported that tensions between him and De Ruyter were brought to its board and the public enterprises department by Tshitangano last February.
Tshitangano's allegations include that De Ruyter:
- Instructed that all procurement over R10m be done with the authority of Eskom’s new divisional boards (generation, transmission and distribution) which are all chaired by him even though at the time they did not have the required delegation of authority;
- Instructed that Eskom — in an effort to effect savings — alter payment terms for service providers from 30 days to 90 days without consulting suppliers;
- Interviewed and appointed Eskom’s head of internal audit — a position that effectively oversees his work — without involving the state-owned entity’s board audit and risk committee; and
- Appointed a fuel oil specialist he interviewed over a weekend without following proper process, and had him work for up to four months without a contract in place.
The letter was discussed before parliament's public finance watchdog the standing committee on public accounts (Scopa) on Wednesday morning, when Eskom appeared in front of MPs to account for its annual financial statements for the year ending 2021 as well as its applications to the National Treasury to procure outside normal procurement processes.
MPs suspended the meeting and declared that it would institute an investigation into the allegations, while some felt that the meeting should go ahead and not allow Tshitangano’s letter, which arrived in their inboxes on Tuesday night, to derail the sitting.
Eskom board chairman Prof Malegapuru Makgoba had told MPs that Tshitangano’s allegations, which were brought to his attention last February, only came up when De Ruyter brought up the issue of his performance with him.
On Wednesday night, Eskom spokesperson Sikonathi Mantshantsha said: “It is premature for Eskom to comment on a letter whose contents we do not know. At any rate, Eskom had been invited to the committee today [Wednesday] to discuss its annual reports and its deviation requests to the Treasury, for which Eskom was ready and prepared to respond to and account for. None of this happened,” he added.
Mantshantsha said the power utility would respond once it has had the opportunity to study the contents of the letter. This article will be updated once this happens.
Tshitangano’s letter was a response to public enterprises department director-general Kgathatso Tlhakudi, and copied to Scopa, the auditor-general, the commission into allegations of state capture, and the Treasury.
In the letter, the career civil servant says that Tlhakudi’s recommendation, contained in a letter to him on February 24, that he engage the Eskom board is “not a workable solution”, as previous attempts to raise the issues with the board before — through chairperson Makgoba — resulted in him being told to raise them with De Ruyter.
“Prof Makgoba expects me to submit allegations of possible wrongdoing by Andre to him through Andre de Ruyter,” he said.
“DG, Section 63(2) of the Public Finance Management Act states that the executive authority responsible for a public entity under the ownership control of the national or a provincial executive must exercise that executive’s ownership’s control powers to ensure that public entity complies with act and the financial policies of the executive.”
He asserted that De Ruyter mentioned the mop issue in an interview with the Sunday Times last November with an ulterior motive to blame him, when it was clarified as early as February 2020 that the mop requisition did not even reach procurement.
He attached an e-mail from Pieter le Roux, a general manager in procurement, who clarified that Eskom’s purchases for a single mop varied between R25 and R56.
“It is not true that the payment was stopped because Andre intervened,” he said.
In another claim, Tshitangano says his suspension came as he was in the processes of closing a few gaps identified by the Special Investigation Unit and Crawford forensic services in an investigation into how Eskom’s contract with Black and Veatch for project management on the Kusile build grew from R100m in 2007 to over R12bn today — and counting.
Tshitangano attached letters and one page of a new contract signed by Eskom COO Jan Oberholzer with Black and Veatch in April 2008 that allowed for an increase in scope and price of the contract.
Tshitangano claimed the letters showed that Oberholzer and Le Roux, who were senior managers in the project, had held meetings with Black and Veatch outside Eskom’s procurement committee and in contravention of Eskom’s procurement rules.
“DG, the 2008 contract brought major changes and introduced conditions that are favourable to the supplier. The execution of the panel was supposed to be on a task order basis after receiving the proposal from any supplier and after the budget has been approved by a governance committee,” he said.
After discussing Tshitangano’s letter, as well as other letters sent last month, Scopa members resolved to institute an inquiry into Eskom to determine the veracity of the allegations. They would also give De Ruyter an opportunity to respond, as well as consider whether actions by the Eskom board and the public enterprises department were satisfactory.
“It does not augur well to have the kind of standoff that we have now,” Scopa chairman Mkhuleko Hlengwa said on Wednesday.
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