State-owned enterprises (SOEs) were at the heart of the state capture project and almost two years into the so-called new dawn the Zondo commission of inquiry is slowly piecing together what happened, while the country continues to suffer the consequences of the attack on these entities.
The government has been pouring money into SOEs such as Eskom to keep the lights on, and into SAA to keep its wings flapping.
Yet the country experienced another bout of rolling blackouts this month with the power system suffering stage 6 load-shedding, its most severe yet.
Since then the cabinet has tasked public enterprises minister Pravin Gordhan with negotiating with newly appointed Eskom CEO André de Ruyter to start his duties at the power utility earlier than expected.
President Cyril Ramaphosa, after cutting short a working visit to Egypt, met Eskom last week and boldly announced that there had been "sabotage" at the power utility.
It wasn’t the first time since he became president that sabotage at Eskom has been alleged. Load-shedding in mid-2018 was also blamed on some sort of sabotage by Eskom employees. This is indicative of the rot that still remains at SOEs, despite the removal of those who were at the helm at the time. It is not just about the top leadership, who are alleged to have worked in conjunction with the Guptas and others to loot these companies, but about the layers who worked beneath them who were complicit.
However, the woes facing the power utility cannot be attributed only to alleged sabotage: it is also in a dire financial situation because of the state capture years.
The state capture commission of inquiry, headed by deputy chief justice Raymond Zondo, started hearing testimony this year regarding Eskom.
Eskom coal supply unit manager Gert Opperman, who managed the coal supply contract with the Brakfontein mine owned by the Gupta family’s Tegeta Exploration & Resources, told the commission in March that former acting Eskom boss Matshela Koko allegedly used his influence to lobby the utility’s Majuba power station to accept substandard coal from the Guptas’ mine.
Opperman testified that after he rejected a consignment of coal in 2015‚ Koko called him in and asked him to reverse his decision.
A month before Opperman’s testimony, Eskom chair Jabu Mabuza told the inquiry that the power utility had laid criminal charges with the Hawks in relation to the coal supply agreement with Tegeta and would start pursuing civil claims.
He said the new board took action after the release of a Treasury-commissioned forensic report into a coal supply agreement between Eskom and Tegeta, in which glaring irregularities and illegalities were found.
The report, released in November 2018, found that senior Eskom executives and officials also violated anticorruption laws for a R659m "prepayment" to Tegeta.
The report recommended criminal investigations into former officials Koko, Anoj Singh and Suzanne Daniels as well as board members over the prepayment.
It also recommended that Singh and Koko be investigated for misrepresenting facts on the matter before parliament.
The Zondo commission also heard from Snehal Nagar, who oversees finances in Eskom’s primary energy division. Nagar testified that he was given only an hour and a half to push through the controversial R500m prepayment for coal to the Guptas in 2016. He described how Eskom deviated from standard procedure to make the prepayment.
The Guptas’ media company also made money out of the power utility. Chose Choeu, former head of Eskom corporate affairs, told Zondo in October that he drafted a R43m contract between the SOE and Gupta-owned newspaper The New Age (TNA) under duress.
The contract apparently bound Eskom to a three-year sponsorship agreement, in which it would bankroll one of TNA’s controversial business breakfasts every month for 36 months at a cost of R1.2m per session.
The commission also heard evidence regarding the national carrier, SAA, which was recently placed under voluntary business rescue.
Zondo heard about dodgy deals at SAA and how former CFO Phumeza Nhantsi was instructed by SAA chair Dudu Myeni to call her personal adviser, who was not employed by SAA, for advice on a multibillion rand transaction with Airbus to swap aircraft. Nhantsi also described a culture of fear and political interference that existed at SAA under Myeni.
During the commission, Myeni was also accused of faking whistleblower reports to get rid of managers at SAA. This was alleged by SAA human resources manager Mathulwane Mpshe.
The evidence given to the commission is just the tip of the iceberg and Zondo has not finished hearing testimony about SOEs.
What is now needed is for the big bosses, the likes of Koko and Myeni, to come before the inquiry and give their side of the story.
They need to be held accountable for the looting of the state’s entities, which have placed SA in such a precarious position.
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