The Special Investigating Unit (SIU) conducted a comprehensive investigation into Eskom’s High Voltage Transmission Projects at the Medupi, Kusile, and Ingula power stations, initiated under Proclamation R18 of 2018. This probe uncovered significant irregularities, particularly concerning a R2.2 billion contract awarded to the Swiss engineering firm Asea Brown Boveri (ABB) for work at the Kusile Power Station.
Background
In March 2015, Eskom awarded ABB a R2.2 billion contract for Control & Instrumentation (C&I) work at the Kusile Power Station. Subsequent investigations revealed that this contract was unlawfully awarded through corrupt means, involving collusion between ABB and certain Eskom officials. To expedite the resolution and avoid prolonged litigation, Eskom and the SIU reached a settlement agreement with ABB. In December 2020, ABB agreed to repay Eskom R1.56 billion, covering the overpayments related to the Kusile contract. Additionally, the National Prosecuting Authority’s Investigating Directorate, in late 2022, finalised a further comprehensive settlement with ABB to pay over R2.5 billion in punitive reparations to South Africa into South Africa’s Criminal Asset Recovery Account (CARA).
Timeline of events
| Date | Event |
|---|---|
| March 2015 | Eskom awards a R2.2 billion Control & Instrumentation (C&I) contract for the Kusile Power Station to ABB South Africa. |
| 2018 | The SIU initiates an investigation into Eskom’s High Voltage Transmission Projects at the Medupi, Kusile, and Ingula power stations under Proclamation R18 of 2018. |
| December 2020 | Following the discovery of irregularities and evidence suggesting criminal conduct, ABB agrees to a settlement, paying R1.56 billion to Eskom as restitution for the overpayments associated with the Kusile contract. |
| October 2022 | Former Eskom executive Matshela Koko and seven others are arrested on charges of fraud, corruption, and money laundering related to the ABB contract. |
| December 2022 | The U.S. Securities and Exchange Commission announces charges against ABB Ltd for violations of the Foreign Corrupt Practices Act (FCPA) arising out of a bribery scheme in South Africa. ABB agrees to pay a $75 million civil penalty to settle the SEC’s charges. |
| November 2023 | The Specialised Commercial Crimes Court in Middelburg, Mpumalanga strikes the case against Matshela Koko from the roll due to extensive delays in preparing for trial by the National Prosecuting Authority (NPA). The court orders that the case cannot be reinstated without the written authorisation of the National Director of Public Prosecutions. |
Conclusion
The SIU and Eskom’s collaborative efforts in investigating and addressing the irregular contract with ABB highlight South Africa’s commitment to combating corruption within state-owned enterprises. The recovery of R1.56 billion from ABB serves as a significant milestone in rectifying financial misconduct and reinforces the importance of accountability and transparency in public procurement processes.