Authorities target ‘mafia’ to end power outages in SA

Mpumalanga ‘coal mafia’ infiltrates legitimate companies, sets up parallel illegal operations, resulting in Eskom receiving sub-standard coal.
Image: Waldo Swiegers/Bloomberg

South Africa is set to tackle “mafia” groups that have compromised power utility Eskom’s operations and contributed to nationwide blackouts, Public Enterprises Minister Pravin Gordhan said.

The state-owned company has called for more arrests to apprehend people suspected of corruption involving the state-owned company. The police on Tuesday apprehended two former employees of Swiss industrial firm ABB Ltd. and their wives for alleged graft linked to more than R500 million of contracts with Eskom.

Read: Corrupt former employees of Eskom contractor nabbed

Pravin Gordhan, South Africa’s minister for public enterprises, following an interview in Johannesburg, South Africa, on Tuesday, July 12, 2022. The privatisation of South African Airways is a vital reform for the country’s battered economy, Gordhan, 73, said in an interview at Bloomberg’s Johannesburg office.

Read: SAA sale part of vital reforms, minister says

“You’ll begin to see more and more visibly push back in this particular regard from the various authorities,” Gordhan said in an interview at Bloomberg’s Johannesburg office.

Law-enforcement agencies have identified a “coal mafia” in the north-eastern Mpumalanga province — home to one of the world’s biggest fossil-fuel-burning power plants — that has infiltrated the structures of legitimate companies and set up parallel operations in illegal mining and coal supplies that have thrived, Gordhan said. That’s resulted in Eskom receiving sub-standard loads of the fuel, including pieces of metal and rubble that damage its plants, he said.

The authorities are also investigating cases in which Eskom is billed for thousands of litres of fuel oil, which is used to run power plants, that aren’t delivered. And probes are underway into instances in which employees are suspected of operating in cahoots with companies to ensure that plant operations are disrupted, to secure a constant flow of work for contractors, he said.

The damage caused by the corrupt practices are among the factors that last month drove Eskom to deepen power cuts to the worst level in almost two years, Gordhan said. The utility, responsible for most of South Africa’s power, has implemented nationwide outages in all but one month this year and has so far instituted rolling blackouts for 24 consecutive days.

Eskom didn’t immediately respond to an emailed request for comment.

© 2022 Bloomberg L.P.

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