Eskom blames unscrupulous contractors for R4bn loss

According to a letter from Public Enterprises Minister Pravin Gordhan to ANC Chief Whip Pemmy Majodina, Eskom has named SA construction firm Stefanutti Stocks and Swiss-Swedish multinational ABB among the contractors that it says were overpaid R4bn for work at the troubled Kusile power station. The other contractors included Basil Read Joint Venture, Tenova Mining and Minerals SA as well as Tubular Construction Projects, a South African firm.

According to Eskom, these contractors benefited from overpayments totalling R4 billion in the construction of Kusile power station. Of this amount, R1bn each was attributed to Stefanutti Stocks Basil Read, ABB SA, and Tubular Construction Projects.

Further R735m was ascribed to Tenova Mining and Minerals SA, the local arm of the global metals and mining firm, and R180m was overpaid to various site service contractors.

Stefanutti Stocks, one of the companies blamed for overpayments during the construction of Kusile power station, has rejected the claim that it took more money than it was entitled to. “Stefanutti Stocks disputes that it, or the joint ventures in which it participates, have been overpaid,” the company said in a statement.

Kusile has run over budget by more than double and suffers from a number of technical faults which has hindered its construction. Medupi, which is a similar power station, has also felt pain from design and construction faults.

Months before, Eskom submitted a claim of R5.5bn against Gupta family’s Optimum Coal mine for undelivered and poor-quality coal, which was later reduced to R1.27bn in an arbitration hearing.

Considering that these contracts took place during the “State Capture” period when even auditing companies were committing fraud, the matter will have to be sorted out by arbitration or at courts.

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