South Africa: ABB Cited in Kusile Overpayments Totalling R4 Billion

  • ABB South Africa, Stefanutti Stocks and Basil Read Joint Venture, as well as Tubular Construction Projects have been named by Eskom as some of the contractors that benefited from overpayments totalling R4 billion in the construction of Kusile power station.
  • The startling revelations have been made by South Africa’s Public Enterprises Minister, Pravin Gordhan to ANC Chief Whip Pemmy Majodina, dated 6 July 2020.
  • Gordhan was responding to Parliament’s Standing Committee on Appropriations (SCOA) request made in February 2020, that Eskom provide a progress report on investigations into the overpayment of contractors.

An Eskom report attached to Gordhan’s letter states that the utility has referred several cases to the NPA and that many of the employees implicated in the inflated contracts had since resigned.

The report describes how ABB had been appointed through a closed procurement tender strategy to work on the Hitachi boiler and Alstom turbine combination used by the utility. Once work commenced, ABB had been issued four major variation orders with no substantiation documentation or records. The report found that these variation orders did not have all the requisite particulars to assess or verify the delays or costs claimed and were grossly inflated.

According to Eskom, ABB South Africa owes R1 billion due to overpayments. Stefanutti Stocks/Basil Read JV and Stefanutti Stocks/Izazi JV owe R1 billion while Tenova Mining and Minerals owes R735 million. Tubular Construction Projects owes R1 billion.

Related news: Eskom to record a loss of R16 billion in 2020

Author: Bryan Groenendaal

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