Busisiwe Mavuso | Eskom mafia directly causing power cuts by mixing byproducts — including rocks — with subgrade coal

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I was expecting a little more from President Cyril Ramaphosa on Sunday night in his response to the Zondo Commission’s recommendations. While there were a lot of encouraging signals in his address, too many of the important elements are “to be reviewed” or “sent for further investigation” while cadre deployment, which many believe to be the root cause of state capture, was not even mentioned.

Items for further follow up include the structure of Judge Raymond Zondo’s proposed Independent Public Procurement Anti-Corruption Agency and Anti-Corruption Commission, which will now form part of a forthcoming larger review into the “optimal institutional architecture”. That recommendation was made in Judge Zondo’s very first report in February this year and BLSA was hoping that government thinking on this would be more advanced.

We also hope that this “review” process will consider input from business and other social partners. We can’t leave it to government alone to set up structures to police itself and taxpayer monies, especially considering recent history.

The urgent need for more effective anti-corruption measures was highlighted in parliament last week by Andy Mothibi, the head of the Special Investigating Unit (SIU), who presented a shocking account of how the “coal mafia” are still operating today, further destroying Eskom’s ability to generate enough power to supply the country.

The nefarious activities he described, which usually involve Eskom officials “colluding with organised crime”, reflect how all-pervasive corruption still is, both within Eskom and in other state structures where checks and balances have broken down.

Mothibi said crooked Eskom officials often use family, friends and even strangers to set up subcontractors and bank accounts to funnel funds through. Kickbacks from vendors often take the form of directly paying creditors of the crooked Eskom employee or paying educational fees for their children.

While none of that is really surprising, the really alarming part is the intricate measures described by Mothibi that the criminal networks implement to be able to supply subgrade coal to Eskom by subverting testing processes.

A separate media report quotes a former crime syndicate operative saying that the syndicates effectively deliver the inferior coal to Eskom and sell the higher quality coal in export markets, making it a highly lucrative enterprise. What causes far wider damage, however, is that the inferior coal is often mixed with coal by-products that are supposed to be discarded, sometimes including rocks, and this causes extensive damage to the power stations and leads to more breakdowns.  “No wonder the machinery in the system is affected as negatively as it is — that’s close to sedition,” Mothibi said.

And we see how difficult it is to expunge the aftershocks of state capture with Mothibi specifically referencing the Brakfontein mine, formerly owned by the Gupta family through Tegeta Resources. “Technical reports have questioned the suitability of coal from the Brakfontein mine for the Majuba power station and the mine’s ability to produce required quantities,” he said, “but despite these concerns a contract was entered into with Tegeta at an inflated price.” Even laboratory testing processes are interfered with by swapping samples and forging certification documents.

The brazenness of their actions is what is really shocking – and it’s because they think they can get away with it. We need accountability, which is precisely what the future anti-corruptions structures need to generate.

The SIU is independent of the police, reporting to the department of justice and constitutional development, and was set up to “investigate serious allegations of corruption in the administration of state institutions and to recover any financial losses these institutions may have suffered through civil litigation”. It has had numerous successes – it has recovered significant amounts of public money and set aside several contracts that were unlawfully awarded by state institutions including Eskom and Transnet. During the Covid pandemic, when some saw an opportunity to raid state coffers with irregular tenders to supply the government with personal protective equipment, the SIU took action against the perpetrators.

This is encouraging, and we need to figure out how it should fit into future anti-corruption structures and even whether it could be made more effective. But the SIU report into Eskom also highlights how important it is to address the Eskom mafia immediately. Feeding power stations with inferior coal is a direct cause of breakdowns in generating units which leads directly to more loadshedding, and more economic misery for South Africans.

Smashing these crime syndicates will not only result in more efficient energy and rail services, it will also have a positive fiscal impact as fewer SOE bailouts will be required while within Eskom, more funds will be directed towards the operational activities to improve its service rather than going into the pockets of dirty crooks. The long-awaited battle against criminality and thuggery seems to have finally begun, even if tentatively. It is a battle for the soul and future of our country – one that we cannot by any means afford to lose.

*Busisiwe Mavuso (@BusiMavuso2) is the CEO of BLSA. This article first appeared in News24 Business.

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