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S.Africa’s Eskom losing well over $55 million a month through theft, ex-CEO says

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SOUTH African state power firm Eskom loses well over 1 billion rands ($55 million) a month from theft, its former chief executive told parliament, saying a previous estimate he gave was conservative.

Andre de Ruyter made the comments in a written submission to parliament’s Standing Committee on Public Accounts (SCOPA) seen by Reuters, following an interview to local news channel eNCA in February where he made sweeping corruption allegations without detailed evidence against Eskom and South Africa’s governing African National Congress.

Shortly after the interview aired Eskom announced de Ruyter would leave his job immediately, cutting short a notice period he was serving after resigning.

The struggling utility has battled to supply South Africa with enough power for more than a decade, with outages at the moment the worst on record lasting about 10 hours a day for most households.


De Ruyter said he could not corroborate or provide more detail about some of his allegations as he did not have documents and other material that remained with Eskom or law enforcement bodies. He said some of the sources through which he learned of alleged unlawful activities feared for their safety.

An Eskom spokesperson said the company noted: “that nothing new surfaced from today’s appearance of Andre de Ruyter at Parliament that is not already dealt with by law enforcement agencies”.

Senior ANC official Fikile Mbalula has rejected the corruption claims de Ruyter levelled against the ruling party and labelled him a failure as CEO.

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The former CEO told SCOPA on Wednesday that suspected theft and fraud at Eskom power stations could total over 1.4 billion rands per month. He had previously estimated the losses at 1 billion rand.

He said he had shared all of his findings with Pravin Gordhan, the minister with political oversight over Eskom.

“I would be very loath to expose myself to any further legal action, particularly in a public forum such as this hearing,” he said, refusing to disclose the names of people allegedly involved in corruption.

He said the biggest losses for the utility could be from coal theft, estimating that if even 5% of Eskom’s spending on coal was stolen it would equal about 500 million rand per month.

Fraud involving prepaid electricity vouchers could exceed 400 million rands per month, he said.

Fuel oil also gets stolen, de Ruyter said, adding that at one power station where he witnessed “excessively high fuel oil consumption”, fuel oil costs were reduced by around 100 million rands after additional controls were put in place.

Theft of infrastructure such as cables, overhead lines, transformers and conductors costs Eskom 170 million rands per month, while theft in the procurement process could be up to 100 million rands per month, de Ruyter said.

He said enhanced controls “have slowed down this type of crime, but internal resistance and non-compliance have hamstrung efforts”.


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