Eskom inquiry: Unsustainable rot at state institutions | Fin24
  • Credit Rating

    'I think Moody's will be happy' - President Ramaphosa says plan to deal with Eskom's debt is imminent.

  • 'No Basis in Fact'

    The PIC commission has slammed Iqbal Survé’s claims about Minister Pravin Gordhan.

  • Fin24’s newsletter

    Sign up to receive Fin24's top news in your inbox every morning.


Eskom inquiry: Unsustainable rot at state institutions

Jul 25 2017 21:00
Liesl Peyper

Cape Town – The table was laid on Tuesday for an extensive inquest into the state of governance, finances and alleged crookedness at Eskom when Parliament heard representations from civil society about the extent of state capture at South Africa’s public institutions.

Members of the portfolio committee on public enterprises interrupted their constituency period to be briefed on reports from the South African Council of Churches (SACC), the Organisation Undoing Tax Abuse (OUTA) and a group of academics which did their own separate investigations into dodgy contracts which had benefited the Gupta family and their business associates.

All three organisations warned MPs that the extent of the “rot” in South Africa's state institutions is unsustainable and that urgent action needs to be taken to clean its house.

Bishop Malusi Mpumplwana from the SACC started the day’s proceedings with a presentation on the organisation’s report, called Unburdening, warning MPs that South Africa is facing a “nefarious mafia-style control” of its public enterprises, including Eskom, Denel and Transnet.

OUTA’s Ted Blom, who briefed the committee on Eskom specifically, made a number of startling allegations, such as that “somebody” at the power utility has a “golden key” who can pay suppliers without documents.

A web of organised crime

He further said during his employment at Eskom, which started in the late 1980s, he uncovered a sophisticated web of organised crime within the power utility. “Over 50 people are involved in this ‘syndicate’, including politicians.”

He asked MPs who will be involved with the inquiry to take a careful look at Eskom’s set of financial results – especially the section dealing with irregular expenditure. “Do yourself a favour and read the fine print in Eskom’s financials. It will give you an idea of extent of state capture and corruption,” Blom said.  

Ivor Chipkin from the University of the Witwatersrand presented on a report compiled by academics, called the State Capacity Research Group, named The betrayal of the Promise.

He warned about the weakening of state institutions and the threat to their administrative autonomy, due to political interference.

Charting a way forward

During question time, MPs lauded the research work done by the three organisations and called on them to also give recommendations for the way forward.

Narend Singh, MP from the Inkatha Freedom Party (IFP), summed up MPs’ sentiments regarding the revelations when he said the parliamentary inquiry will in all likelihood discover things that will seem like a picnic compared to the goings on in the rest of government.

In their responses, the three groups called on Parliament to delve deeply into the allegations that are in the public domain.

OUTA’s Blom suggested that the inquiry into Eskom stretch as far back as 2001 when Eskom started commercialising its operations.

Chipkin said a “shift” is necessary in which the autonomy of state institutions will be recognised afresh. He acknowledged that it is not only government and parastatals that are to blame, but that there are private companies, lawyers and accountants that are complicit in the wrongdoing.

The SACC’s Mpumlwana said there is a much broader decline of moral values and that the decline is not only at government-level.

The parliamentary inquiry into Eskom will start officially on Tuesday August 1 when Parliament resumes its activity for the third quarter. The first witnesses will be former Eskom board members Venete Klein, Nazia Carrim and Viroshni Naidoo and current interim board member Pat Naidoo. 

SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.

Read Fin24's top stories trending on Twitter:

sacc  |  outa  |  ted blom  |  state capture  |  eskom inquiry


Company Snapshot


Struggling power utility Eskom will take centre stage at this year's mini budget

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

What do you think about private healthcare in SA?

Previous results · Suggest a vote