Question NW852 to the Minister of Public Enterprises

Reply:

In addressing the recommendations of the State Capture Commission, the department formed working groups with Special Investigating Unit (“SIU”), state organs and other enforcement agencies to implement proclamations relating to maladministration concerning the affairs of SOCs. This initiative resulted in the employment of a civil litigation strategy to recover funds associated with SOC losses sustained during the state capture era and other forms of administrative corruption.

According to the information received from Eskom:

(a) Total amount Eskom lost due to:

1. Corruption: R203 156237-00.
2. The amount is included above,
3. The amount is included above since bribery is a form of corruption.

(b) The amounts below exclude amounts related to investigations conducted by the SIU. Process to recover outstanding amounts by the Asset Forfeiture Unit or in terms of the court order is ongoing.

Project number	Value	Reporting Period
2018 -12568	R3 330 000	FY 18/19
2018 - 12451	R403 994	FY 20/21
2020 - 13218	R1200 000	FY 21/22
Project number	Value	Reporting Period
2022 - 14037	R130 076.24	FY 22/23
2021 - 13600	R51 620	FY 22/23
2023 - 14158	R90 000	FY 23/24

(c) Consultation with SIU has revealed the following success in progress registered in relation to recoveries (including ABB, Koeberg disputes, Kusile and daily corruption at power stations):

Parties	Nature of Dispute	Claim Amount	Status
SIU v SAP and Eskom	On 10 November 2022, the SIU instituted action against SAP. Eskom was cited as a second defendant; however, no relief is sought against Eskom. The SIU seeks the following relief: That Eskom Board Tender Committee's resolution of 29 September 2016 authorising the conclusion of agreements with SAP for licences, maintenance and other services be reviewed and set aside; Declaring the contracts are unlawful and invalid; and 3. Ordering SAP to pay Eskom an amount of R1,01 billion.	R1.1bn	The settlement agreement R 500 million has been signed by both parties and SIU is the process of making it an order of the court.
SIU / Eskom / ABB South Africa Pty Limited (ABB)	On 31 March 2023 the SIU, Eskom and ABB filed an ex parte application to review and set aside set aside the contract awarded to for ABB the supply and installation of the Control and Instrumentation Systems at Kusile Power Station and for consequent just and equitable relief.	R1.56 billion	In December 2020, Eskom/SIU and ABB concluded a settlement agreement in terms of which ABB repaid an amount of R1.56 billion to Eskom The court order was issued on 05 April 2024 and Eskom and SIU were ordered to publish said order in both English and Afrikaans newspapers within 15 day of the order.
Eskom vs Deloitte	Eskom instituted action for the setting aside of the award of two contracts to Delloitte on the basis that they were improperly awarded, and the recovery of approximately R207 million.	R207 million	On 20 March 2020, Eskom and Delloite concluded a settlement agreement in terms of which Delloite agreed to pay an amount of R150 million to Eskom. It was further agreed that investigations had shown no evidence of state capture or corruption on the part of Delloite, there were technical irregularities in the procurement process, Eskom had benefited from the services rendered by Delloites, and that Delloites was entitled to be compensated for the services rendered to Eskom.
Eskom vs McKinsey and Company	Eskom instituted a claim against Mckinsey for the recovery of the fee paid in respect of consultancy services rendered which were unlawfully awarded.	R1.7 billion	In July 2018 Eskom and McKinsey concluded a settlement agreement of R 1 billion.
Eskom vs Trillian	In 2018, Eskom obtained a court order against Trillian for the payment of R595 million related to the fraudulent pretext of Trillian being a supplier development and localisation partner to McKinsey	R595 million	The amount has not yet been recovered due to ongoing liquidation proceedings.

According to the information received from South African Airways:

Since 2019, South African Airways (SAA), have lost a total of R23 056 231.17 due to corruption, fraud and bribery. Of this amount a total of R17 209 114 has been recovered.

Year	Amounts lost due to:	Amounts recovered
	corruption	fraud	bribery
2023		R78 205, 98		R0.00
2022	R126 000			R126 000
2021	R10 600 000			R14 483 114.00 Inclusive of interest
2020	Nil
2019		R12 252 025,19		R2 600 000 Preservation order was granted

According to the information received from Transnet:

TRANSNET CIVIL RECOVERY ASSOCIATED WITH PROCUREMENT IRREGULARITY TO DATE (APRIL 2024)
MATTER	AMOUNT RECOVERED
McKinsey	R870m
Transaction Advisory Services - Regiments; Trillian and previous Transnet executives	R1,5m
1064 Locomotive Supply Agreements (“LSA”) with: Bombardier Transportation (“BT”) Wabtec (formerly General Electric)	Bombardier Transportation R376m (price correction and locomotive retention) Wabtec R70,3m (outstanding supplier development obligation and locomotive retention) Settlements to be presented for Order of Court in Review Application
Liebherr	R54m Settlement to be presented for Order of Court in Review Application
SAP	R244m Part of omnibus settlement in collaboration with SIU and National Prosecuting Authority
IGS and former employees	R26m per judgement
PPE procurement (procurement of breathalyzer straws)	R37m
TOTAL	R1,678,8bn

1. Transnet investigates all allegations received pertaining to fraud, corruption and bribery. This is encapsulated in our Whistle Blowing policy as well as the Anti-Fraud and Corruption policy. Allegations originate from issues reported via the Whistle Blower hotline, internal reports received via management as well as from completed Transnet Internal Audit and Auditor General of South Africa audits/reviews which either recommend further investigations or which identify red flags relating to possible fraud and corruption. Allegations are also received from the Department Public Enterprises (DPE) Hotline as well as from civil society and Transnet investigates all these allegations, including allegations and reports which are published in the media.

2. Transnet Internal Investigations focus attention on gathering and assessing information and evidence which is within Transnet’s domain. There are limitations for Transnet to access information pertaining to financial flows relating to external parties. Transnet therefore places significant reliance on law enforcement agencies and the Special Investigating Unit (SIU) to conduct further enquiries in matters where alleged or suspected cases of fraud, corruption and bribery are referred as per the respective legislative frameworks. This includes reporting obligations stemming specifically from Section 34 of the Prevention and Combating of Corrupt Activities Act, 2004 (PRECCA) which places a duty on defined persons in a position of authority (i.e. director, manager, Chief Executive Officer) to report offences over R100,000.

3. Transnet institutes civil recovery proceedings, generally with the SIU, in the High Court or Special Tribunal to set aside all irregular contracts associated with fraud, corruption or bribery. These contacts are taken on review with the intention to recover on a just and equitable basis.

4. Transnet also refers all allegations of fraud, corruption and bribery to law enforcement agencies to investigate for criminal prosecution.

Matters referred to Law Enforcement:

1. Transnet has referred 15 cases of alleged corruption and 11 cases of alleged fraud to law enforcement agencies for further investigation. Transnet’s actual losses can only be determined once the outcome of the criminal investigation is concluded where the extent of the losses can be quantified.

2.The total value of matters referred by Transnet to law enforcement for further investigation is R2,119,116,991.78. This represents the value of the contracts or transactions where there are allegations of wrongdoing. This can broadly be broken down as follows:

a) Corruption allegations to the value of R1,907,625,107.00

b) Fraud allegations to the value of R211,491,884.78

c) Bribery. Transnet does not capture data with respect to bribery as this would be covered under the offence of corruption.

Remarks: Reply: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date: