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By Lunga Simelane

Journalist


State capture: R57bn yet to be recouped

Eskom, Transnet, and SAA suffered the biggest losses from state capture, totaling R57.7 billion. The DPE is working to recover the lost funds.


The department of public enterprises (DPE) is still at work to recover the monies lost due to state capture, with the top three state-owned entities (SOEs) – Eskom, Transnet and the South African Airways (SAA) – experiencing the biggest losses, totalling R57.7 billion.

The DPE released its progress report on the implementation of recommendations issued by the Commission Inquiry into State Capture and other commissions by the department.

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In terms of the general measures employed by the department to eradicate state capture, the DPE said in 2018 it initiated several reforms.

“The DPE also motivated for the issuing of proclamations authorising the Special Investigating Unit (SIU) to investigate maladministration in all the six SOEs under the [DPE].

“Proclamations were eventually issued in relation to the affairs of Eskom, Transnet, Denel, SAA and Alexkor,” the department stated.

The state capture report revealed systemic corruption and collapsed governance in SOEs which were led by rogue board members and senior executives.

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Except for the South African Forestry Company Limited, all the six SOEs under the DPE were subjects of state capture. Part of the initiatives introduced during that period included exploiting SOEs’ intellectual property for the benefit of Gupta-linked entities.

The report revealed that the boards of the SOEs neglected their fiduciary responsibilities or, worse, used their powers to corrupt the entities which they have been appointed to protect.

The report stated that the breakdown per SOE indicated that at Eskom, the number of incidents reported was 16, 14 were closed and two are active. No case was referred for criminal investigations.

Billions unlawfully paid

At Transnet, there are eight incidents reported, five closed, one active and two referred for criminal investigations. At SAA, the number of incidents reported was 16, with 11 closed and five cases referred for criminal investigations.

With Eskom contracts amounting to R14.7 billion subject to state capture, the DPE revealed that R4.8 billion was being claimed against former contractors and the power utility’s former directors.

“Eskom and the SIU successfully recovered R2 billion unlawfully paid to contractors,” the report stated.

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“Eskom has registered 11 criminal cases with the law enforcement agencies to ensure that perpetrators of state capture are prosecuted.

“The Memorandum of Incorporation of Eskom was revised in 2019 and all board tender committees were done away with.”

Regarding the SIU recommendations, the unit launched investigations into 14 coal transportation service providers concerning payments from 1 January 2010 to 31 December 2022.

At Transnet, the value of tainted contracts identified by the commission amounted to R41.2 billion. The DPE said Transnet recovered R744 million concerning the 1 064 locomotives contract and R1.181 billion in the crane contract.

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“Transnet opened 12 criminal cases for investigation by law enforcement agencies with the view to ensure perpetrators of state capture are prosecuted.

“The value of contracts under investigation amounts to R 57.417 billion. The value of successful civil recoveries amounts to R72 million,” the report stated.

At the SAA, the value of contracts tainted by state capture and are under investigation amounted to R1.8 billion. The DPE has registered 10 criminal cases of implicated SOE directors.

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