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Chris Yelland joined the BizNews Power Hour, to discuss news of the NPA’s (National Prosecuting Authority) investigating directorate being awarded a restraint order of R1.4bn, against former Eskom execs and contractors – one of which is Michael Lomas. Paul O’Sullivan also joined in on the conversation. The corruption buster has had dealings with Lomas in the past, and told BizNews that the 72-year old UK businessman should “tender his co-operation and voluntarily return to South Africa to get evidence.” The pair also weigh in on the powerships that are off the Cape coast, which Yelland is skeptical of. – Jarryd Neves
Chris Yelland on the powerships and alleged corruption surrounding the contracts:
The powership contract, for 20 years – with fuel making up R1 per kilowatt hour out of the tariff bid of R1,50 per kilowatt hour – means that the fuel itself is 2/3’s of the tariff. That 2/3’s is linked to the US dollar/rand exchange rate and the international commodity price of liquefied natural gas (LNG). The price is also linked to the carbon price. I don’t know if you saw what’s happening to the carbon price in Europe, but it’s really gone up dramatically. In South Africa, the carbon tax is very low and the upside potential for the carbon tax in South Africa is very high. There’s massive upside risk in that tariff – which is not fixed for 20 years or linked to CPI for 20 years. It’s linked to these variables that have got massive upside risk.
Paul O’Sullivan on the powerships:
If Eskom hadn’t have been captured by criminals, we wouldn’t need the powerships. Certainly, we should have never needed these powerships in the first place. But we must thank the likes of Trindade and all the other people at Eskom feeding at the trough.
Chris Yelland on the fraud and corruption allegations surrounding Trindade, Lomas and co:
These executives have been arrested in the past – Eskom executives and the Tubular executives. There are court cases pending and we hear now of massive corruption, under the cloak of supplier development programmes and BEE. Probably well-meaning programmes and intentions that are massively abused and [used as] a vehicle for corruption. Today we hear that the NPA has frozen the assets of these former Eskom executives and Tubular executives to the tune of over R1bn. It’s hard to imagine corruption on that scale, directed at a few individuals. I think it’s more than just a few individuals. It’s endemic and multilayered within Eskom and some of its contractors.
Chris Yelland on Abram Masango, former group executive at Eskom:
He started off at Kusile and was the project manager at Kusile. He was intimately involved with many of the contractors and got pushed into this position of group executive. This is on the Exco of Eskom, along with about 15 to 20 other executives. And as you say, group executive is where the big money is. It’s just astounding how money gets channeled from contractors. Apparently, it gets channeled from contractors to other entities, under the guise of donations towards community development and schools, for example.
Then there’s this other entity to which the money is channeled, then funnels the money to individuals at Eskom who are responsible for gathering money from these contractors. Of course, the contractors have lots of claims for extras. So, they are a favoured in terms of overinflated prices for extras to the contracts. So, contracts beginning to escalate. Donations come in from the contractors. The money gets channeled back to these executives. That’s the narrative that is presented by this massive data dump that we have seen and which is resulting in the latest stories. I believe there’s more to come.
- Michael Lomas corruption scandal no surprise, says Paul O’Sullivan
- SA prosecutors seek extradition of former British Eskom contractor
- Former Eskom execs, contractors see R1.4bn in assets seized
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