Eskom, ABB reach R1.5bn settlement for Kusile cost overrun
Construction company ABB South Africa has agreed to pay back R1.56 billion for overpayment of work done on Eskom’s Kusile plant.
The power utility and the Special Investigating Unit (SIU) launched investigations after the company voluntarily disclosed collusion with Eskom officials in the tender to develop the coal-fired power plant in Mpumalanga.
Eskom board chairperson Malegapuru Makgoba told media on Friday that an agreement had been signed earlier in the day.
The construction company was among the others named by Eskom to have benefited from overpayments.
“The settlement is inclusive of the capital amount and interest. The agreement will be subject to the review of the High Court in due course,” said Makgoba.
“This is the beginning of a story of recovering money that was stolen from the public through corrupt means and obviously this is a good day for Eskom and the public of South Africa.”
ALSO READ:
The Kusile development is marred by cost overruns and delays, with corruption allegations against Eskom officials as well.
Eskom CEO Andre de Ruyter added the power utility would not blacklist the construction company.
According to de Ruyter, ABB South Africa will continue its work on the plant but will not derive any profits from the project.
“The challenge that we now have is that Kusile is an ongoing project. The work on this power station in terms of this control and instrumentation is about 90% complete and for Eskom to now approach the market and appoint a new contract with different technology will probably cause us to incur a delay in the commissioning of Kusile by another 4 years.
“It will create a real risk of claim from other contractors for standing time amounting to about R1 billion and it will substantially increase the risk of load shedding over the next 4 years.”
He said he expects the payment to have been settled before the end of the year.
Eskom still expects to recover another R3 billion in funds lost to irregular expenditure.
No arrests have been made but investigations are continuing.
ABB South Africa joins a long list of offenders, including McKinsey, Deloitte, PwC and members of the Gupta family and their associates.
Read full statement here:
Eskom, ABB reach R1.5bn settlement for Kusile cost overrun by Nokukhanya Mntambo on Scribd