Eskom boss im­pli­cated in dodgy deal

CityPress - - Business - STAFF RE­PORTER busi­ness@city­

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.

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