Public Enterprises draws up terms of reference for Eskom probe

Thursday, May 25, 2017

Pretoria - Public Enterprises Minister Lynne Brown has instructed her department to draw up the terms of reference for a probe into power utility Eskom.

“I’ve instructed my department to draw up the terms of reference for a broad scale inquiry. This will be the first one that I am doing myself. We have a memorandum of agreement with the Special Investigation Unit (SIU).

“We are considering asking the SIU to review the contents of all reports into alleged wrongdoing at Eskom, conduct further investigations as necessary and report to a retired judge.

“I would like the judge to consider the SIU’s report, make recommendations on remedial actions to me and I will brief, if necessary, the NPA [National Prosecuting Authority] on all recommendations,” Minister Brown told media on Thursday.

This comes on the back of the return of former Eskom CEO Brian Molefe to the utility. Last year, Molefe announced that he would be stepping down as CEO following the release of the State of Capture report by former Public Protector Thuli Madonsela.

However, Molefe has recently returned to the power entity.

Minister Brown, who briefed the media prior to tabling the Department of Public Enterprises (DPE) Budget Vote in Parliament, said focus has moved from the fact that the power utility faced grim operational challenges two years ago, to dealing with allegations of corruption.

“Getting to the bottom of allegations of impropriety since 2007 when load-shedding first made landfall, there have been at least seven investigations into alleged maladministration and corruption at the utility, culminating in the State of Capture report last year,” she said.

In response to a question as how long the probe would take, Minister Brown said it was still early days.

“There are lots of allegations of corruption. The seven reports were largely dealt with by the [Eskom] board. I’d like to see all of them being looked into. It is wider than the State of Capture report. The timeframes I will negotiate with the SIU,” she said, adding that the probe will include coal procurement contracts.

Eskom turns corner

Minister Brown said the power utility has turned a corner, with no power supply interruptions for more than 510 days and generation reserves being at 3 000 megawatts (MW). The utility, she said, is well on track to meet 80% energy availability.

A total of 153 MW of renewable energy from Independent Power Producers (IPPs) went into commercial operation in December 2016. This brings the total contribution of renewable IPP energy to the national grid to 4 180 MW.

Eskom’s asset base increased to R691.7 billion in the third quarter of 2016.

Minister Brown, meanwhile, said the utility plans to reduce its financial dependence on government by R150 billion.

DPE performance

Minister Brown said her department spent R253 million of its 2016/17 budget (94.8% of its total budget). The underspending of R14 million was primarily due to vacant posts that will be filled.

The department has been allocated a budget of R266.7 million in 2017/18.

Minister Brown said spending on the compensation of employees is a significant share of the department’s budget over the medium term. Spending on goods and services is expected to decrease. – SAnews.gov.za

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