CEO says he’s sleeping well
ALLEGATION: ESKOM OVERPAID BY R1 BILLION
Basil Read’s Mapasa says power utility mismanaged Medupi and Kusile.
Basil Read CEO Khathutshelo “K2” Mapasa admits he is not losing any sleep over the alleged overpayment by Eskom of an estimated R1 billion to a Stefanutti Stocks Basil Read (SSBR) joint venture and another joint venture Stefanutti Stocks has with a different partner.
The overpayment forms part of the almost R4 billion alleged overpayment by Eskom to various contractors at Kusile Power Station.
An Eskom briefing document dated June 10, which was compiled in response to a query raised by the chair of the Parliamentary Standing Committee on Appropriations, said investigations by the Special Investigations Unit (SIU), Bowman Gilfillan and Eskom into these overpayments to contractors at Kusile is ongoing.
Mapasa said Basil Read sold its 50% stake in the SSBR joint venture effective from 1 September 2017, had to obtain Eskom’s consent for this transaction, and was given indemnity in a full and final settlement agreement “for whatever claims that can come up historically or in the future”.
Mapasa further claimed that Eskom and Minister of Public Enterprises Pravin Gordhan are “playing a bit of politics and semantics” about this matter and denied there was anything irregular about the additional payments made to the SSBR joint venture related to the ‘Package 16’ (miscellaneous buildings) contract.
“It sounds nice to say you have overpaid a contractor by R1 billion or whatever the number is, but the fact of the matter and reality is that Eskom mismanaged both Medupi and Kusile and this is why there are contractual claims,” said Mapasa.
“These [Package 16] buildings were supposed to be built in a certain sequence but when we started doing the building, certain sites were not available, hence the projects were delayed and resulted in extended time. This is not the same as the Guptas actually stealing money.”
Package 16 comprised 81 buildings at Kusile, including the unit auxiliary bays.
The briefing document, commenting on the circumstances that led to the overpayment, said the joint venture put in claims for additional ‘preliminaries and general’ (P&G) due to prolongation and stacking and working in multiple areas at the same time.
Claims not substantiated
The document said these claims were not substantiated as required by the contract and that Eskom’s representative and contracts manager made interim payments to the contractor between 2015 to 2018, without the requisite substantiation.
It said this was done on the basis that they would conclude an overall “settlement agreement” but stressed there was no consistency or verification of the actual P&Gs being paid on a monthly basis.
The monthly payments, according to the document, varied between R15 million and R50 million a month but no settlement agreement was reached.
It said the new project director in early 2018, stopped the interim payments that were being made and referred the non-payment to the dispute adjudication board (DAB).
“Eskom successfully defended this adjudication and is now in mutually agreed discussions with SSBR and the standing DAB about the process to determine the actual claim entitlement.
Stefanutti Stocks stated emphatically the company disputes that it or the joint ventures in which it participates have been overpaid by Eskom.