ANC set for R50m election windfall
Ruling party to score from sale of Hitachi stake
ANC front company Chancellor House stands to make R50-million from the sale of its stake in Japanese power giant Hitachi.
It is suspected some of the money will be diverted to fund the cash-strapped party’s election campaign.
Hitachi was awarded a R38.5billion contract by state-owned Eskom to build boilers at its Kusile and Medupi power plants soon after selling a 25% stake to the ruling party in 2005.
At the time, Eskom was chaired by Valli Moosa, a member of the ANC executive and fundraising committee.
Hitachi said this week that it was buying back its 25% stake, but the amount paid would remain confidential. The deal was clinched on February 1.
“All parties have agreed to strict confidentiality about the terms and conditions of the contract,” said Hitachi spokesman Yash Bridgmohan.
But two sources close to the deal said the stake would be sold for R50-million after Hitachi and Chancellor House agreed late last year to value its African subsidiary at R200-million.
Chancellor House had paid R6-million for its stake, said one of the sources.
In 2010, Hitachi Power Africa CEO Johannes Musel admitted that Chancellor House stood to be paid R50-million in “dividends” from the Medupi project over eight years.
On the face of it, the purchase of the shares relate to Hitachi’s global merger with Mitsubishi Heavy Industries, but the timing of the deal — months before the elections — is raising eyebrows.
Three well-placed sources said the ANC was cash-strapped ahead of the elections and some of this money would fund its election campaign.
“Chancellor House always funds the ANC elections,” said one. Another said some of the money would be used to buy a coal mine in KwaZulu-Natal.
While President Zuma’s government is profiting from the electricity crisis, electricity prices have risen 300% under his leadership
ANC spokesman Jackson Mthembu would not discuss the sale.
“Chancellor House has its own board, its own CEO,” he said. “That’s their deal, not the ANC’s.”
Hitachi’s reputation has taken a serious knock in South Africa through the shoddy construction work it has been responsible for at Medupi, the huge power station that is being built in Limpopo.
The contract involved Hitachi taking a leading role in building hi-tech boilers for Medupi, but the work done on the vital welds was so dire that construction on parts of the site had to be delayed for months while repairs were carried out by spe- cialist welders brought from Thailand.
The presence of the foreign workers heightened tension on an already fractious site.
The boilers have to operate in temperatures of up to 269°C and pressures of 295 bar.
The latest technical glitch lies with a steam reheater, an internal structure of the boilers that Eskom said was not done to specification and would affect the lifespan of the equipment.
Chancellor House declined to comment.
Democratic Alliance leader Helen Zille told a political meeting in Nelspruit yesterday that the decision to sell Hitachi shares was proof the ANC used income from state contracts to finance its election campaign.
“This is corruption, pure and simple,” she said. “Zuma’s ANC is getting contracts from Zuma’s government — contracts which they then mess up, causing big delays and power emergencies for the whole of South Africa, which makes more people unemployed because companies cannot grow or even attain full production capacity, making people unemployed.
“Then Zuma’s ANC sell their shares and use the profits to get him re-elected. While President Zuma’s government is profiting from the electricity crisis, electricity prices have risen 300% under his leadership,” she said.