Explosive evidence on state capture

Assets were supposed to cost R91bn, but are in excess of R1 trillion

PARLIAMENT has been presented with explosive evidence on state capture by three organisations that probed the looting of the country’s coffers.

The Organisation Undoing Tax Abuse (Outa) accused Eskom of fleecing the country of billions of rand with the escalation of the build programme of power plants, including Medupi, Kusile and Ingula, from R91 billion to more than R1 trillion.

Ted Blom of Outa said the assets were supposed to cost R91bn, but they were in excess of R1 trillion and Eskom owed South Africa an explanation.

It said Eskom owed South Africa a refund over cost escalations.

Outa also said load shedding in 2008 was self-inflicted with coal companies holding the power utility hostage with high prices.

The South African Council of Churches (SACC), Outa and the State Capacity Research Project were yesterday giving evidence against top officials and the Guptas on state capture.

Yesterday was the first day MPs met the organisations to discuss state capture and the looting of billions of rand.

Blom said Eskom had said in the mid-2000s the building of the three coal-fired power plants would cost R91bn, but that had gone up to more than R1 trillion.

Medupi was to be built for R26bn, but then costs went up to R32bn and later the cost rose to R150bn, said Blom.

Ingula’s cost shot up from R20bn to R40bn.

Blom accused Eskom of increasing the cost of building the power plants.

“The assets were supposed to cost R91bn, but the costs are in excess of R1 trillion,” he said.

“Eskom owes us a massive refund,” he added.

Bishop Malusi Mpumlwana of the SACC said South Africa had become a mafia state with grand corruption.

He said the focus may be at national level, but the evidence they gathered at local and provincial level was also shocking.

Mpumlwana said that the pattern of corruption had created a mafia state that had replaced constitutional bodies.

Mpumlwana said there was a parallel governance structure that has taken control of key institutions and decisions.

The capture of state-owned entities and the raiding of departmental budgets was a pattern in this corruption.

“The cabinet was supposed to be above reproach. But when doubts emerge the question remains whether the boards should not be appointed by the national legislature,” he said.

Professor Ivor Chipkin of the Research Project said its report, titled “The Betrayal of the Promise”, was answering questions on state capture following its investigation.

Chipkin, who also made a presentation at the SACP congress recently, said the academics were responding to the current challenges and how a shadow state had replaced a constitutional state and its institutions with decisions of government taken elsewhere.

Evidence of state capture has emerged in the public linking top government officials with the Guptas, Chipkin said, adding the capture of Eskom was part of the bigger picture of what was happening in the country.

Eskom spokesperson Khulu Phasiwe said the cost escalations in the power plants were due to a number of factors such as industrial actions and other delays like replacing contractors they were not happy with over the work they were doing at Medupi.

He said at Medupi there was a delay of 18 months due to labour disputes and other factors.

Phasiwe said Ingula cost R29bn, Medupi has cost R145bn and Kusile R165bn.