Moneyweb
Power utility Eskom would be paid R1.56bn by ABB South Africa for the final settlement of a dispute involving a contract that was awarded irregularly.
This was announced on Friday at a joint media briefing by Eskom, the SIU, and the Ministers of Justice and Public Enterprises.
In a statement, Eskom said the settlement of the overpayment dispute related to a contract “unlawfully awarded through corrupt means for work at the Kusile power station.”
The agreement will be subject to the review of the High Court in due course.
The Head of the SIU, Advocate Andy Mothibi, said the settlement was an important vindication of the tireless efforts of the SIU investigators working in close co-operation with the Eskom and ABB teams.
“The investigation arose as a result of ABB’s voluntary disclosure of alleged collusion with certain Eskom officials to irregularly award ABB a R2.2 billion Control & Instrumentation (C&I) contract for the Kusile power station during March 2015,” he said.
“With regard to this and other contracts in which evidence of criminal activity has been established, Eskom and the SIU have laid dozens of criminal cases with the law enforcement agencies,” Mothibi said.
He said further to the collusion in awarding the contract, certain Eskom officials illegally and fraudulently induced Eskom to pay an estimated R800 million to ABB in illegal Variation Orders.
“In order to avoid lengthy and protracted litigation, Eskom and the SIU agreed that the settlement amount is a fair and reasonable reflection of the damages that Eskom, and by implication the people of South Africa, suffered as a result of this unlawful contract,” said André de Ruyter, Group Chief Executive of Eskom.
De Ruyter said Eskom accepted that ABB had performed parts of its obligations on the contract, with the implementation of the technology on the power station currently standing at 90%.
“It is with this in mind that Eskom, despite the contract being unlawful, is only claiming from ABB the portion of the payment in excess of what was independently determined as being a fair and reasonable contract value.”
However, he said due to the critical nature of the work that is now 90% complete, the parties have agreed to continue installing ABB’s C&I technology at Kusile on terms similar to the original contract, but without any profit accruing to ABB.
De Ruyter said this would not be feasible nor would it be in the national interest to replace the contractor at this late stage.
Two former executives of Eskom have already appeared in court and are being prosecuted in connection with these and other irregularities.
