What De Ruyter will tell MPs in corruption testimony
Former Eskom CEO André de Ruyter believes his estimate that R1bn is being stolen a month from Eskom is “conservative”.
And he insists in the presentation he will give to parliament’s standing committee on public accounts on Wednesday — which Business Day has seen — that he took all the necessary steps to inform law enforcement authorities of the theft and corruption at the utility as required by the Prevention and Combatting of Corrupt Activities Act.
De Ruyter will appear virtually at a physical meeting of the committee at its request to justify statements he has made on corruption and theft at Eskom.
In his written statement of 4,600 words he does not repeat allegations made in an interview with eNCA that high-ranking government officials were involved in the corruption, or that Eskom was a “feeding trough for the ANC.
“I have publicly made the statement on a number of occasions that an estimated R1bn per month is stolen from Eskom. This is, if anything, a conservative estimate and is based on my to assessment my attention, of ”the De losses Ruyter suffered will by Eskom that have come tell MPs.
He outlines widely reported types of corruption taking place at Eskom’s power stations which in some cases involves the operation of cartels, but he cautioned that he is constrained by a number of factors in providing certain information. These include having to protect sources who fear for their safety and whose identities could be known to the Hawks.
PROCUREMENT
“Substantial fraud and corruption takes place in the procurement process, particularly at power stations. Reconciliation of inventory to actual stock counts has been an ongoing process to address legacy and ongoing fraud. In financial year 2020, R1.3bn had to be written off, with a further R0.8bn in financial year 2021, equating to about R70m — R100m a month. Implementation of enhanced controls and procurement and inventory management processes have slowed down this type of crime, but internal resistance and noncompliance have hamstrung efforts.
“Significant infrastructure theft, including cables, overhead lines, transformers and conductors costs Eskom approximately R2bn per year. Nontechnical losses of electricity, which accounts for a significant amount of electricity theft, amount to about R200m per month, or R2.3bn per year, according to the Eskom 2022 annual report.
“There is significant theft and fraud of prepaid electricity vouchers, which is estimated to amount to billions of rand per annum. The total loss due to prepaid voucher fraud could exceed R5bn per year, or R400m per month,” De Ruyter says.
Furthermore, coal theft through the replacement of good quality coal with poor quality coal is estimated to be a significant contributor to losses.
“Given that Eskom spends about R132bn per annum on buying primary energy, the bulk of which is coal, even a 5% loss factor on coal would equate to some R500m per month.”