Electricity pylons at an Eskom coal-burning power station near Sasolburg. Picture: REUTERS/ SIPHIWE SIBEKO
Electricity pylons at an Eskom coal-burning power station near Sasolburg. Picture: REUTERS/ SIPHIWE SIBEKO

Two former Eskom executives, two business directors and representatives of seven companies are expected to appear in court on Thursday, in relation to corruption involving the construction of the troubled Kusile power station.

The arrests were made in the early hours of the morning in Mpumalanga, Limpopo and Gauteng by the police's elite investigating unit, the Hawks, and the National Prosecuting Authority's (NPA's) investigating directorate.

In a joint statement, the Hawks and NPA said the investigations began when suspicions were raised about the construction of new coal power stations Medupi and Kusile.  

This comes as the country recently experienced almost two weeks of rolling blackouts once again, which led to Eskom having to resort to stage six load-shedding as a result of a shortage of capacity.

Eskom, which supplies virtually all SA’s power, is hamstrung by staggering debt, maintenance issues and design flaws at Medupi and Kusile. Ratings agencies have identified the state power utility as the single largest risk to the economy.

The Hawks and NPA said their investigation revealed that there was “apparent gross manipulation of contractual agreements” between contractors, Eskom employees and third parties at the Kusile power station.

“In-depth investigations pointed to the fact that the contract was manipulated in a number of ways including, among others, manipulation of the Eskom's procurement system by officials who occupied senior management positions, de-scoping of the contract at Kusile without justification and with conflict of interest by Eskom employees,” they said.

The Hawks and NPA said in June 2015 that Eskom's Kusile project management team submitted a request to the power utility's procurement committee for a mandate to negotiate and conclude a contract with one of the companies.

The contract was approved for R745m to build two air-cooled condensers (ACC) units at Kusile power station. It is alleged that from February 2015 to July 2017, the appointed companies, other related entities and individuals shared approximately R30m among themselves, they said.

All the arrested individuals are expected to appear in the Johannesburg magistrates’ court.

mailovichc@businesslive.co.za