Eskom boss implicated in dodgy deal
An Eskom manager allegedly earned about R20 million in bribes to enable construction group Tubular Construction Projects to snatch a lucrative Kusile contract from international power group Alstom.
This money was allegedly paid into the bank account of Hlakudi Translation and Interpretation CC from 2015. France Hlakudi, Eskom’s contract manager at Medupi and Kusile, is the only member of this business entity.
Large amounts of cash were also withdrawn from the account over the same period, raising suspicions that the account was used for money laundering.
Hlakudi retains his Eskom position and exerts influence over who is awarded contracts for these enormous power-station construction projects.
The alleged scheming at Eskom’s Kusile power plant in Mpumalanga was revealed in an anonymous letter sent to Zethembe Khosa, chairperson of the Eskom board, in September. The author of the letter said he was approaching Khosa, rather than Johnny Dladla, who was acting Eskom CEO at the time, because Dladla was good friends with Abram Masango, Eskom’s group executive for group capital, who was allegedly protecting Hlakudi. Dladla has since been removed from the post by Eskom, supposedly so that management can be rotated.
The allegations made in the letter are currently being investigated by Eskom and the police. City Press’ sister publication, Rapport, understands that arrests will soon follow.
The allegations are about a contract that was awarded to Alstom for the provision of air-conditioned condensators at Kusile. Alstom subcontracted a company called DB Thermal, then part of SPX Technology, which, in turn, awarded a contract to Tubular to set up the coolers. SPX and Tubular then became embroiled in a conflict and Tubular was on the edge of serious financial trouble in 2015.
A representative for Tubular, Mike Lomas, who was previously CEO of Group Five, then allegedly convinced Hlakudi that Eskom should do business directly with Tubular and that Alstom and SPX should be bypassed. Hlakudi allegedly used his influence at Eskom and, in September 2015, informed Tubular in a letter that Eskom would negotiate directly with Tubular in respect of the condensators at Kusile’s units four to six.
On the same day, a representative of Tubular allegedly paid R400 000 into the bank account of Hlakudi Translation and Interpretation CC. Rapport has seen evidence of this.
Eskom settled with Alstom and SPX and compensated them for the profit that they would have lost. It is understood that this was done despite legal advice that the move would be detrimental to Eskom, although the power utility denies that it was disadvantaged. Tubular is believed to have worked out that its tender price for the direct contract with Eskom should have been R1.5 billion, but reduced it to R708 million. This was allegedly done to ensure that the tender would serve before a tender committee over which Hlakudi could exercise his influence. The committee has authority over contracts up to the value of R750 million.
Lomas and Tony Trindade, CEO of Tubular, allegedly reached an agreement with Hlakudi that the difference would be made up through extensions and variations of the contract.
Eskom confirmed that the contract value was increased to R1.2 billion in July this year.
In February, Eskom’s suspended interim group executive Matshela Koko instructed that Hlakudi be removed from Kusile, but Koko has since been suspended by Eskom. The disciplinary process is still under way. One of the charges against Koko is that he undermined members of Eskom’s top management by instructing that Hlakudi and someone else be removed.
Koko allegedly bypassed Masango, who heads Eskom’s building projects, and gave the instruction directly to Frans Sithole, the project manager at Kusile. Sithole has since left Eskom.
Through his advocate, Koko has argued that he acted within his authority and that he will later testify about why he wanted to get rid of Hlakudi.
Hlakudi was on Eskom’s list of witnesses, but did not arrive at the parliamentary probe into the power utility to testify as he was obtaining legal advice. He later said he would be willing to testify, but only if his legal representative was present.
The allegations were put to Lomas and Trindade, but neither responded by the time of going to print.