Kusile housing project exposed as another Eskom money pit

South Africa’s state owned power utility Eskom has been exposed in more wasteful expenditure. Taxpayers’ money was pumped into the Wilge Residential development Project, which remains unfinished. The 336 housing units were meant for Kusile employees. Meanwhile the debt stricken enterprise spends billions on rent and transport for plant workers. Kusile, Eskom’s newest plant, is also incomplete and over budget. Last month the plant itself was the cause of rolling blackouts when conveyor belts failed. The plant was commissioned to be built in 2007 and was expected to be completed in 2015. Kusile’s completion date has been pushed back until 2023. The chairperson for the Portfolio Committee on Public Enterprises, Khaya Magaxa says action must be taken against all parties involved in the latest costly failure at the Mpumalanga plant. – Melani Nathan

South African lawmakers question Eskom on failed Kusile housing project

By Paul Burkhardt

(Bloomberg) – South Africa’s debt-stricken power utility faces further scrutiny after lawmakers criticised a housing project for workers that cost more than five times the initial estimate and was eventually abandoned.

Planned accommodation at Eskom Holdings’ Kusile plant ballooned to R840m ($56.5m) from an estimated R160m as a result of “fruitless and wasteful expenditure,” according to parliament’s portfolio committee on public enterprises. The project was scrapped and remains unfinished, while Eskom is alleged to have spent billions of rand on rental accommodation and transportation for its employees, the committee said in a statement.

The failed project is an example of mismanagement at Eskom that’s left it struggling to meet demand for electricity and needing continued bailouts from the government. Kusile, the utility’s newest plant, is behind schedule and over budget.

The loss-making utility relies on government to service R464bn of debt and is at the center of investigations into allegations of widespread corruption during the administration of former President Jacob Zuma.

Eskom had shown a “serious disregard for taxpayer money,” and the matter must be investigated and action taken against all involved, the committee said. The utility’s management is scheduled appear before the lawmakers on February 17.

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