Eskom lifts lid on Dentons report

7 February 2017

Johannesburg - The investigation by global law firm Dentons cost Eskom R20m, and not R27m, said chairperson Baldwin Ngubane.

Ngubane was speaking at a briefing on the findings of the investigation at Megawatt Park on Tuesday, following “huge media interest”.

The investigation, launched in 2015 by Dentons, was an effort to determine reasons behind load shedding across South Africa at the time and reasons for the delayed infrastructure build, among others.

The report was not meant to substantiate the suspension of four executives in 2014, said Ngubane. Instead, it was intended to find problem areas at the power utility and to "re-calibrate" Eskom.

"Contrary to what is reported by some media, both the board and I have never interfered with the investigation," said Ngubane, without elaborating on the findings of the report. He added there was an unvarnished interest to obtain the facts on the state of the business. "Any act of interference would have been idiotic".

Dentons had confirmed Eskom's initial suspicions of problem areas, and the investigation was stopped to save further resources. "We did not curtail the investigation for nefarious reasons," he said.

"Suggesting the board tinkered with findings is an insult to the board and Dentons," he said.

The contents of the report have been brought into question. Reports in BusinessLive implied it had not been released to the public in an effort to cover up corruption by Eskom management. The fact that the report is accessible only to some board members raises the risk that Eskom is still being managed by the same people who are accused of corruption, according to BusinessLive.

Previously, Eskom spokesperson Khulu Phasiwe said releasing the report would have an adverse impact on employee morale. "The board’s decision to swiftly implement the recommendations of the review rather than suffer from analysis paralysis as well as not impacting employee morale negatively has been vindicated by the significant achievements of the turnaround strategy," Phasiwe said.

He confirmed to Fin24 that the Dentons report revealed “nothing new” about areas in which the power utility needed to improve. He added that Eskom started implementing a turnaround plan following the recommendations from the report as far back as July 2015.

"By November 2016, the majority of the recommendations (in the report) had been fully implemented," said Phasiwe.

He added that the turnaround strategy implemented was successful as there has been no load shedding for 18 months, there is currently an excess electricity generation capacity of 5 600 MW and the new build programme is delivering (infrastructure) ahead of schedule.

This article first appeared on Fin24, see here.