Even finance minister admits Eskom is massive liability

The name of Eskom, Africa’s largest electricity company, has become synonymous with the worst corruption scandals in South Africa.

The sacking of yet another of its short-lived CEOs this week and the release of dire financial results confirmed the depth of the crisis plaguing the power utility.

Finance Minister Malusi Gigaba admitted Eskom represented the single worst crisis facing the government.

“Eskom is the biggest risk,” Gigaba said. “There would be no currency and no economy for the country if Eskom went belly up.”

Parliament has for months been probing Eskom over state capture allegations.

A damning report published a year ago by former public protector Thuli Madonsela first laid bare misconduct at state-owned Eskom – founded in 1923.

Madonsela detailed how the Gupta business family, who are close friends of President Jacob Zuma, allegedly arranged the 2015 appointment of Brian Molefe as Eskom chief to line up lucrative contracts to syphon off cash.

Officials and former workers appearing before a parliamentary hearing in recent weeks have made startling revelations of how Eskom executives helped the Gupta family benefit from favourable deals.

Whistleblower Mosilo Mothepu, who worked for a company advising on the deals, told the parliamentary committee that Eskom was identified as a “cash cow” by the Guptas.

In one case, Eskom paid more than $49 million to a Gupta-owned mining firm, Tegeta, to help it buy a coal mine from Glencore.

The Guptas would then sell the coal to Eskom.

Former Eskom chairperson Zola Tsotsi told lawmakers how one of the three Gupta brothers, Tony, threatened him with dismissal because he was not “helping” them.

“Tony told me: ‘Chairman, you are not helping us with anything. We are the ones who put you in the position you are in. We are the ones who can take you out!’” he said.

Respected former finance minister Pravin Gordhan, who was abruptly sacked by Zuma last March, sharply rebuked former Eskom executives appearing before the committee.

“You brought Eskom to its knees, the biggest utility in Africa,” Gordhan told the utility’s former chief financial officer, Anoj Singh.

All implicated executives have pleaded innocence.

“There are hundreds of decisions taken at Eskom that the CEO will not know about or know the details of,” said Molefe.

Opposition Democratic Alliance’s MP Natasha Mazzone drew parallels between the denials and omerta – the mafia’s code of silence.

But Lynne Brown, a close ally of President Jacob Zuma and the minister in charge of state enterprises, denies that she had covered up governance and financial irregularities at Eskom.

“We are not at that point yet that we can prove that people have done things wrong,” Brown told MPs.

Eskom’s woes started in 2007 with the highly unpopular power shortages that plunged many neighbourhoods into darkness on a nightly basis.

Now, the new head of the ruling party, Cyril Ramaphosa, has moved in to overhaul Eskom and bring culprits to book.

But rescuing Eskom will not be easy. Profits plummeted 34% and the firm is heavily indebted to the tune of R300 billion. –