Eskom Inquiry: Abram Masango

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Public Enterprises

28 February 2018
Chairperson: Ms D Rantho (ANC)
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Meeting Summary

The Committee  was supposed to hear evidence from former SAA Board Chairperson, Ms Dudu Myeni. However, she informed the Committee Secretary via SMS that she was waiting to be guided by her lawyer on how to respond to the invitation by Parliament, look at the legalities of coming to the Inquiry and will revert back to the Committee in writing. Members said these were delaying tactics that undermined the process. Some Members recommended a subpoena be issued to Ms Myeni whilst other Members felt a letter should be sent to re-invite her to appear the next week. The Inquiry Chairperson will discuss with the Parliament legal team on the best way forward.

The Evidence Leader asked the Mr Abram Masango questions to establish the facts of his meeting with Mr Matshela Koko and Mr Salim Essa at Melrose Arch; the suspension of four Eskom executives; the meeting with Mr Dan Marokane; what happened at the meeting with Mr Zola Tsotsi, the whistleblower report; the political agenda of Mr Koko; his intimidation and victimisation by Mr Matshela Koko.

The Committee asked Mr Masango about his treatment at Eskom following the whistleblower report; Eskom awarding of contracts; reasons the relationship he had with Mr Koko was ruined; if he had met the Gupta or Zuma family; state capture at Eskom and who should face the full might of the law. The Committee expressed concern that Mr Masango had not being protected when he released the whistleblower report and asked if he had received further death threats. They asked about his forced training at Harvard University; his state of mind when meeting Koko and Essa at Melrose Arch; the press conference about the suspension of four executives; his suspension based on ‘undeclared conflicts’; Koko's sabotaging of Mr Masango’s position; if he suspected the tender process was interfered with; his opinion of Dr Ben Ngubane; Eskom procurement and supply chain procedure; how Eskom identifies a sole source for coal supply; the removal of a consultant, the conspiracy to remove a senior manager at Kusile Power Station Project; the Kusile Power Station Project main contractor and why the duration of power projects could be exceeded. The Committee asked Mr Masango to clarify the letter he received this morning after he liaised with his lawyer.

The Committee said that it would investigate Mr Masango’s allegations because they involved prominent people at Eskom and its procurement practices. The Committee requested a short meeting that was closed to the public. Afterwards it indicated that it had decided on its focus areas for its 6 March 2018 meeting. It would seek legal advice on Ms Myeni and write a registered letter to her known address requesting her to appear before the Committee, failing which the Committee would issue her a summons.

Meeting report

Chairperson of the Inquiry: We were expecting Ms Dudu Myeni from South African Airlines but she will not be coming today. I know Members want to comment but let me explain that she had communication with the Committee Secretary through SMS that her lawyer was not around and did not follow the proceedings of the inquiry. She is waiting for guidance from her lawyer on how to treat the invitation from the Committee. It was only yesterday that her lawyer became aware of the invitation so she would revert to the Committee after her lawyer has checked the legalities of appearing before the Committee. I observe that the Committee wrote her a formal letter but she responded with an SMS.

Mr S Swart (ACDP): The Committee has another example where witnesses have been given due notice to appear, yet the witness fails to turn up. I do not accept this explanation because it is affecting the tight schedule of the Committee. I view this as delaying tactics being played yet again and I suggest that the Committee issue a subpoena that the Committee is entitled to do. It’s unacceptable that Ms Myeni has allegations to answer to but she is telling the Committee that she needs more time to appear on the day that she has to appear. The Committee should be mindful of such tactics as it still has other witnesses billed to appear before the Inquiry. The same delay tactics were played by Mr Anoj Singh and the Committee should guard itself against these.

Mr N Singh (IFP): I am not a lawyer but I think this is part of administrative justice so the Committee would have to accept her reasons for now. Nevertheless, I appreciate that the Committee has time frames. The Chairperson and legal adviser must write Ms Myeni a letter inviting her for a meeting with the Committee and she must advice the Committee by 2 March of her compliance. The legal adviser can look into the circumstances of her nom appearance and advice the Committee. Alternatively, she must be summoned to appear next week Tuesday or Wednesday.

Ms N Mazzone (DA): Mr Singh is far more diplomatic than I am. I would request that the Committee immediately issue a summons to Ms Myeni. She was given an opportunity to appear before the Committee and people know what the Committee is doing. To say that her lawyer is not following the proceedings of the Committee is unacceptable. I have been on the Committee for a very long time and this is the modus operandi of the individual in question. Everyone that has appeared voluntarily to the Committee has shown that they are bona fide citizens. The Committee has often found out why in the long run it had to summon a witness. This Committee is not in the interest of Parliament but is set up in the interest of South Africans and if the Committee asks individuals to testify it is to do their duty to the country. It is most unfortunate that the Committee would have to summon someone to do their country duty. If someone wants to play games with the Committee, Members should not play the same game. If the Committee wants things done legally as per Ms Myeni’s request then the Committee should follow that route and summon her to appear.

Dr Z Luyenge (ANC): I fully concur with Mr Singh that a letter should be issued to Ms Myeni for her to appear before the Committee and ensure that the Committee is seen to be fair. Also the Committee must ensure that its time for completing the Inquiry is not affected by excuses that are not understandable. The Committee should give her the benefit of the doubt, being the first time. It is quite appropriate for the Committee to issue a letter to Ms Myeni that she must appear before the Committee by Wednesday failing which she would be summoned. (Time slot 10.40-11.24).

Chairperson: The Committee would look at the response given by Ms D Myeni’s lawyer and would discuss with the legal team to know the best way to respond. After the Committee engages with Mr Abram Masango, it would discuss the focus of its meeting with the former Minister of Finance who was the former Minister of Home affairs which is scheduled for next week. The Committee needs to make a decision regarding the Inquiry to ensure that ensure that it has a concrete resolution on matters before the time allocated for the Inquiry. (Time slot 11.26-12.40).

Witness: Mr Abram Masango Eskom Group Executive for Group Capital
The Chairperson administered the oath and Mr Masango took the oath and gave an opening statement.

Mr Masango: I will explain what I know and what I have been exposed to during my employment at Eskom. I have been requested to give evidence before the Committee to assist in the Inquiry into Eskom governance, procurement and financial sustainability. The Committee requested that I attend as a witness to assist in the challenges currently facing Eskom. I have been advised that the evidence given by Mr Matshela Koko and Mr Anoj Singh in January 2018 would be mentioned. I have not had access to the transcript or recording of the meeting with them. The Committee also has reason to believe that I would be able to assist with certain events that led to the suspension of five Eskom executives. I point out that I am only aware of four executives that were suspended and not five as set out in my invitation dated 21 February 2018. Even though I have been requested only to provide the Committee with limited information it is prudent that I set out salient issues which must be brought to the attention of the Committee.

Mr Masango read out his statement to the Committee (see document).

Questions by Evidence Leader
Evidence Leader, Adv Nthutuzelo Vanara: Mr Masango, you are aware that Mr Koko has left the employ of Eskom and that based on the contract between him and Eskom, Eskom would not be able to take any disciplinary action against him. Is that your understanding as well?

Mr Abram Masango: Yes.

Evidence Leader: However that does not stop any criminal prosecutions being made against Mr Koko should there be a basis for such. Is that your understanding as well?

Mr Masango: Correct.

Evidence Leader: My questions are aimed to solicit events that would allow the Committee to make a recommendation that certain criminal investigations be pursued against Mr Koko. Let’s start with the meeting at Melrose Arch. You refer to Mr Koko giving you directions to Melrose Arch because you had never been there before. How were these directions given to you - were they verbal or sent through the phone?

Mr Masango: The directions were verbal. He was directing me how I should go to Melrose Arch. I was with my driver as Mr Koko was directing us and it took some time to get there as I was not familiar with the place.

Evidence Leader: Who was you driver. Please give the details of your driver.

Mr Masango: The driver that took me there was Mr Sibusiso Ntuli. The driver was working with me at Kusile.

Evidence Leader: This driver, Mr Sibusiso Ntuli, was he an Eskom employee or was he your private driver.

Mr Masango: He was an Eskom employee but was working through a contract. He was subcontracted.

Evidence Leader: Should the Committee require more information to locate him would you be in a position to assist us or the law enforcement agencies to locate Mr S Ntuli.

Mr Masango: Yes, I still have contacts for Mr S Ntuli and can assist. I think he still working with Kusile if I am not mistaken.

Evidence Leader: And when you get to the venue did Mr S Ntuli stay behind or did he join the meeting.

Mr Masango: He stayed in the car. He did not join the meeting.

Evidence Leader: My understanding is that you were going back to Witbank at the time you received the call and you had to turn back to Melrose Arch. Did you communicate to your driver or did you share with him the reasons you were going back to Melrose Arch?

Mr Masango: Yes, I did tell him that we were not going back to the Kusile project but that we were going back to another meeting at Melrose Arch. But I told him that I did not know the directions but would give him the directions as soon as these were communicated.

Evidence Leader: Did you tell your driver who you were meeting at Melrose Arch?

Mr Masango: Yes, I did tell him that I was going to meet Mr Koko who my driver knew.

Evidence Leader: In paragraph 7.2 page 16 of your submission you say during the week of 11 March 2015 then open bracket ‘I cannot recall’ then you close bracket. Explain what you mean it’s a bit confusing. Is it the exact time that you cannot recall or is it the exact date?

Mr Masango: Advocate, I think the 11 March 2015 date is correct. I was trying to work it back and put the sequence of events. The 11 March 2015 date was on a Wednesday of that week if I remember; there was another meeting by Mr Tsotsi. I put 11 March 2015 but I think it’s the most appropriate date if I can remember the sequence.

Evidence Leader: Now that you’ve explained what Mr Koko told you about the suspension of three executives and himself, you were confused at that time. There were certain developments that happened –indeed four executives were suspended, indeed Mr Koko is the only one who comes back as earlier indicated during your discussion at Melrose Arch. The Committee knows there was a meeting in Durban about the suspension of these Eskom executives to be executed by the Board. In light of all of these facts what do you make of Mr Koko’s involvement in the entire suspension of these Eskom executives?

Mr Masango: Advocate, I must say that in my mind until all the information was on the table, it was always difficult for me to connect the dots. But I was always suspicious of the treatment I received. During the time those four executives were suspended what amazed me was that Mr Koko was always calling meetings and I was also called to those meetings but I never attended those meetings. And I indicated earlier that I had a good relationship with Mr Koko but I started to be suspicious as we carried on and I was careful not to expose myself. I never analysed why Mr Salim Essa was in the meeting at Melrose Arch because I and Mr Koko had a good relationship but as time went on I became suspicious that something was going on.

Evidence Leader: Given what happened I understand that you were suspicious. Now I have added more information or evidence that there was a meeting at Durban in the former President’s house to conceptualise the suspension of Eskom executives to be executed through the Board. What do you make of Mr Koko’s involvement in what happened?

Mr Masango: The conclusion that I draw is that Mr Koko is the runner or is working for somebody. I would qualify that with what happened with the Eskom executive. I did not only give Dr Ben Ngubane a whistleblower’s report but I also told him what was happening at Eskom. But I started to realise that within Eskom there was a certain system that if you go and report to the Board Members or the Minister you are reporting to the same person. If I want to conclude on that question – while Mr Koko was doing these things he was probably receiving instructions from some certain people in Eskom. I want to add that at some time I wanted to resign because I wanted to follow good processes and question the bad things. In Eskom there were good people that advised me not to resign and said they would find a way to right the wrongs.

Evidence Leader: Did Mr Koko tell you at Melrose Arch that you were one of those people that would act in the stead of some of the executives that would be suspended?

Mr Masango: Yes, he did tell me in the presence of Mr Salim Essa that you are the potential guy who might be called to come and help.

Evidence Leader: Did he specify the position in which you were to act? Or was it a bold broad statement that he made.

Mr Masango: Mr Koko gave a very broad statement. That’s why in my submission I recalled that Mr Koko stated that I had the potential to act as Chief Executive officer which surprised me. But I must also indicate that at that meeting he was nervous and I had never seen him as nervous as that. I assumed that it was because of the shock of suspending four executives in a corporation such as Eskom. That was why I was asking him for the reason because at the time I thought there was something big going on but he did not give me the reason.

Evidence Leader: Did you eventually meet with Ms Nhanhla Kraai?

Mr Masango: Yes, it’s correct. I met with her the same day. As I did not get through to Mr Dan Marokane, I then called Ms Kraai, the finance manager, who was my next boss.

Evidence Leader: When you met with Ms Kraai, what did you tell her?

Mr Masango: I explained what I had encountered – that I was called to a meeting, my phone was taken and I explained what was said in the meeting. It was for me very concerning because if you get to a meeting and your phone is taken and a bomb shell is dropped. I had to confide in someone that was why I tried to get through to Mr Dan Marokane. When I did not get through to him I reverted to Ms Kraai.

Evidence Leader: Then Mr Marokane returns the call. What then happens in that telephonic discussion?

Mr Masango: The following day a meeting was scheduled to be chaired by Mr Dan Marokane because at the time a claims committee had been established to look at the claims from head office that was supporting Kusile in different projects. On the following day Mr Marokane is not present at the meeting he was supposed to chair. The following day on Thursday I secured a meeting with Mr Marokane on Saturday.

Evidence Leader: Did you meet with Mr Marokane before he was suspended or after?

Mr Masango: After he was suspended. Because the suspensions where officially confirmed by Mr Zola Tsotsi when he called me and the other two colleagues

Evidence Leader: Why did Mr Zola Tsotsi call you and the other colleagues that you mentioned?

Mr Masango: At the time I did not know why he was calling. When I woke up on Thursday I realised that someone had been calling. When I looked at the caller identity it was the Eskom office secretariat. I also found a message that the Board Chairman Mr Zola Tsotsi wanted to meet with me at 8.00am. I went for the meeting scheduled by Mr Marokane first then I left and I went to see the Chairman. At Mr Zola Tsotsi’s office I found Mr Edwin Mabelane and Mrs Nonkululeko Veleti  waiting. The secretary did not call us into the Chairman’s office but called us to the boardroom where other members were waiting. We were advised by Mr Tsotsi that four executives had been suspended with immediate effect and these were the same that had been mentioned by Mr Koko earlier. At the meeting the Board Chairman asked me to assist as the Acting CEO, Mr Edwin Mabelane to act in Generation because Mr Koko had been suspended, Ms Nonkululeko Veleti  to act as the finance director and he also asked me to act in Mr Dan Marokane’s place as Group Executive for Group Capital and we all agreed. The meeting did not last for more than 10 minutes and subsequent to that we spoke to the media. This meant that everything had been arranged previously, then we accompanied him and the Board Chairman addresses the media.

Evidence Leader: I want to remind the Committee of Mr Zola Tsotsi’s testimony. Mr Tsotsi testified that what shocked him the most after the executives had been suspended was how quickly new officers had been shortlisted to act in the stead of those suspended. So whilst Mr Tsotsi in the capacity of Board Chairman had to communicate to Mr Masango and others that they were to act in the stead of those suspended, he had no idea how your names came up to act in these positions. Please comment on that.

Mr Masango: I don’t have any comment on that but the events unfolded as I have explained.

Evidence Leader: Let’s go back to your whistleblower’s report on page six paragraph five. The Committee has had the opportunity to play the recording of a meeting where this whistleblower’s report was tabled and discussed at a special board meeting. A decision was taken later on in the day on 22 March 2017. Mr Koko was to be afforded an opportunity to address the Board on why he should not be suspended. The Committee knows now that the meeting did take place and the Committee knows now that Mr Koko was not suspended. In your report you made serious allegations of a number of things that were not going right at Eskom and the Board had an opportunity to discuss those issues. The Board in its wisdom had taken a decision but that decision was not communicated to Mr Koko. In light of the seriousness of those allegations, in light of the board’s own admission of its intolerance of that conduct what do you make of the board’s fiduciary duties? Did the board members discharge their fiduciary duties?

Mr Masango: In my own opinion, I do not think the Board discharged its fiduciary duties. Suffice to say before the whistleblower, when I met Dr Ben Ngubane I explained my observations to him and I requested he investigate the matters I discussed with the other executives so as to articulate what I had told him. When he asked me to write a report I told him I would only write a report pertaining to my division. The things happening in other divisions, he should ask the other executives to give him that information. I got to know later about the meeting that took place where the Board did not carry out Mr Koko’s suspension. It’s important to explain to the Committee how I knew about the meeting. At the time I realised that the Board was not really helping itself to sort out the issues in Eskom. I came across Mr Khulani Qoma who said I must go back to talk with Dr Ben Ngubane. I refused because he was in the same camp. When he asked me why I explained to him that I had initially explained what was happening but Dr Ngubane had not done anything about it and people like my supervisors would know that I had talked to him. Then Mr Khulani Qoma told me that I was fighting the right person because Dr Ben Ngubanee had told him that he wanted to suspend Mr Koko but some people had phoned the Minister and Mr Koko was not suspended. Also I started to be more careful to people talked to. At the time I did not trust Mr Khulani Qoma because I thought he was on the other side. Any time you talked to people, you could be victimised because I was also victimised and mugged several times.

Evidence Leader: On page eight paragraph 5.5.2 you claimed Mr Koko would treat employees differently if he believed that they had a different political agenda to him. You are all officials you are not supposed to have a political agenda; you must be doing a job that’s not captured on your contract at Eskom. What are you referring to by a different political agenda?

Mr Masango: We are officials and that is my argument. This argument arose when Mr Koko sent General Martin to remove some employees at the Kusile project. I asked him what were the reasons and he could not give me the reasons. Instead he says to me ‘command and control’. Let me go back a bit to when he instructed General Martin to remove these employees. General Martin informed me that Mr Koko had instructed him to remove some employees without telling him the reason. He informed me first because we both had a good working relationship. I gave him the number of Mr Frans Sithole, the project manager at Kusile, for him to inform him. I knew that I would meet up with Mr Frans Sithole because we normally had a meeting of CEO’s contractors to discuss what happened with contractors of projects. At the meeting Mr Sithole told me of Mr Koko’s request. I told him to meet with me at my office and there he articulated what General Martin had told me. I asked him to come with me to Mr Koko’s office and there I told him to articulate what he had told me to Mr Koko and he did. I did not tell Mr Sithole that I knew about the removal of employees before he told me. Mr Sithole told Mr Koko to state why the employees had to be removed because professionals and senior employees could not be removed without any reason. His reason was ‘command and control’. When I asked Mr Koko, he said the two of you do not understand the ‘command and control’. I asked Mr Sithole to leave the office because he was my subordinate and I wanted to know the meaning of ‘command and control’. I confronted him and I asked him why he had not called me if anything was wrong instead of asking General Martin to remove the employees. Mr Koko said I was supporting the wrong politicians. Mr Koko says I am supporting Premier DD Mabuza (Mpumalanga Province). I told him to remember that I was not supporting anybody but I was employed by Eskom to support its stability. The meeting did not end very well and I ended up leaving. I spoke with Mr Sithole after I left Mr Koko’s office and told him that Mr Koko had not given me any reason but we had to carry out his request because he was the Acting CEO. I told him the best thing we could do was to investigate why it had happened but I knew it would be a tough one. Till today I could not establish the reason those employees were removed.

Evidence Leader: Lastly in your submission you portrayed yourself as been intimidated and victimised by Mr Koko. Mr Koko is longer employed by Eskom therefore you should expect that the charges laid against you would be investigated by the new Acting Group Executive of Eskom or his successor but it would be a fair hearing. What is your take on that?

Mr Masango: That is my expectation. In early 2017, a certain General Rakau was brought in by Mr Brian Molefe responsible for the security. He had a meeting with me although at the time I did not have the full picture he requested me to have peace pact with Mr Koko. I said to him that there was nothing that I had done to Mr Koko so I do not know what I should apologise for. He says to me “Mr Koko has instructed me to bring your head and if I do not, I will lose my job”. He added that my kind are very small. My conclusion from that was that a lot of things were happening at that time - all the things we were suspicious of and we reported them. Mr Koko believed I was behind some of the things that affected him because I was trying to make things right at Eskom. I must confess that I had meetings with some staff that were advising me not to resign from Eskom but we were followed because people took our pictures in restaurants. I was also mugged three times on the road so I could see that these things were very serious. That was the reason we made sure that the people that were trying to correct things were not exposed because I was already exposed. If you were to ask me about a fair hearing, I cannot be investigated by my enemy’s people who would investigate me based on certain instructions. But that I will deal with later.

Evidence Leader: No further questions.

Questions by Members
Dr Luyenge (ANC): I appreciate the briefing by Mr Masango and it is an eye opener about important institutions like Eskom. I applaud you for the stance you have taken. Do you think at Eskom the promotion of ethical values and professionalism in execution of duties was practised by both the executive and the Board?

Mr Masango: I still believe strongly that the governance processes and Eskom ethical policies are one of the best. The problem starts when people do not comply and breach the policies. In the past years that I worked at Eskom we did very well but in the past five years the wheels started to come loose. I put it to you that there is still a lot of work to be done in terms of governance policies and ethical practices. What pains me is that there are some very good employees that are in Eskom who end up compromised because they are put into position and are expected to behave as instructed by seniors. This starts to create confusion and right now Eskom needs a clean-up.

Dr Luyenge: This means that the practices that exist in Eskom need to be cleaned up totally.  What is taking place at Eskom is similar to that of the Department of Education in the Eastern Cape in that the will to do the right thing is lost and staff do things in an unconstitutional way. When Mr Zola Tsotsi informed you about the four executives that would be suspended was he in a state of fear, that is, shivering or was he excited? Did he show that he was the generator of the suspension, that is, he was part of it, that he was instructed?

Mr Masango: When we entered the boardroom it was very tense. I must say he found it very difficult to express what was to happen – that four executives had been suspended. The phrase ‘to help Eskom’ was more of an instruction that we could not refuse without any reasons given. Immediately after a meeting of ten minutes we had to go to the media. It was a planned sequence that had to happen. I do not think that Mr Zola Tsotsi was himself from what I know of him.

Dr Luyenge: Mr Zola Tsotsi alleges that there was a meeting in Durban coordinated by Ms Dudu Myeni and in that meeting he was told there were at least four executives that had to be suspended. In your view, Mr Tsotsi relaying the information that speaks to what Mr Koko told you initially, do you suspect that there had to be a big boss that was controlling the suspension to make sure it happened?

Mr Masango: Yes, I agree with your comment. When it unfolded the way it was set out, remember I met Mr Koko who shared what would happen. The next day it happened when Mr Tsotsi shared it with us but I started to have some concerns. In these meetings, I did not get any verification – no reasons were giving although we were not Exco, we were entitled to know why because we were general managers. However I was hopeful that when I met my boss Mr Dan Marokane I would get the reasons for the suspensions. I would also like to share what happened when I met with Mr Marokane on Saturday at 2.00pm

Dr Luyenge: Please share that with the Chairperson in your own time. It’s important information that the Committee needs to know but share it in your own time. Please tell me what the attitude of your colleagues who were in the same position.

Mr Masango: No one was happy. It was a very awkward and tense moment.

Dr Luyenge: Essentially would you share the same sentiments with me and say when you issued your whistleblower report, already Eskom had collapsed. There was no executive there was no Board there were just individuals who were hell bent on ensuring that service providers that were Gupta related got what they wanted. Please tell me your view? Even the report that you wrote that addressed what was going on was not really taken seriously but was called a whistleblower report instead. Please confirm if you were you comfortable with that.

Mr Masango: I concur with your view. When I gave the report out I thought the wrongdoings in Eskom would be investigated and confirmed, but rather the report I gave out was investigated instead.

Dr Luyenge: R390 million was paid to a child related to one of the executives at Impulse International a company awarded the contract for Kusile trunk cabling project. And also payments were made to Trillian Capital Partners a company that had no contract with Eskom. What do make of this, do you have hope that Eskom can be fixed and this level of mismanagement can be addressed?

Mr Masango: I do have hope that Eskom can be fixed but I must indicate that Eskom is a complex organisation and it would be difficult to fix if you do not have the relevant people who can go to the relevant places and fix it. I can say from top to bottom there are links and if you remove a certain link at the top you must remove the link at the bottom as well. The clean-up has to be done properly. If Eskom adheres to policies and governance process many things can be avoided. It becomes a problem when things are done outside the process because then the process is faulted.

Dr Luyenge: In relation to the service providers in Eskom it seems only the Gupta related companies were getting preferential treatment and prioritised while other companies were not. Please state if other service providers received the same preferential treatment like the Gupta related companies who were paid even when jobs had not being done.

Mr Masango: Any payment made whether it’s a prepayment or payment after the service has been provided must follow a strategy that is presented or approved by the Board or relevant board committee. Payments on services without any contract is awkward.

Dr Luyenge: Please speak to the issue of Mr Brian Molefe’s early retirement and policy of prepayment at Eskom. Is prepayment a normal practice at Eskom or did you experience such practices at Eskom that were benefiting certain service contractors? Mr Koko said prepayment was a normal payment process while one of the senior managers stated it was not. Please give you view on this?

Mr Masango: I never experienced any transaction that was done with prepayments. Any contract given had its payment schedules embedded within the contract. All the payments made were made with the confirmation of work done by the relevant authority e.g. quantity surveyor and the payment certificates are signed. I never got involved in payment terms because it never fell within my responsibilities. The payments made at Group Capital followed the payment schedule I outlined earlier.

Chairperson: Please explain what happened during the meeting with Mr Dan Marokane.

Mr Masango: Mr Marokane arranged to meet with me on the Saturday. I asked him to explain to me why the four executives were suspended but he could not, except to say that these things are political and he could not explain further. Then I told him that if that was the case on Monday I would return to Mr Zola Tsotsi and tell him that I do not want to act anymore. I asked for his advice but he said I should inform the other executives called to act to continue in their acting position because we had worked together and we understood the basic principles of the job. Also he asked me to tell the others to carry on with the six month projected plans that we had earlier. He also advised me to ‘stay closer to the people I was working with in the Mpumalanga Province because these things are political – you would not be able to survive and please stay closer to the guys there.’ I must indicate that at some stage I was also starting to get disappointed with Parliament because when all this things were happening no one was attending to it until this Committee was established. The reason I say that is after I speak to Ms Nhlanhla Kraai, I get a call from Mr Koko who said I had spoken to someone. So I started to get concerned and worried that these guys were either following me or receiving information from someone. I want to state that when Mr Brian Molefe came in he treated us fairly. I explained what I was doing to him when he came in and he gave me a target and we had a very good relationship. However, when he left and Mr Koko came in, things accelerated in the wrong direction because all of sudden things started unfolding. Therefore I decided to raise it with the Board Chairman. I must also state that we had different forms of reporting issues to the higher authority.

Ms Mazzone: I am sure that this is a wide entangled web that would be difficult to understand expect you are part of it. I will try to unpack some of what you have said so that people would be able to understand the depth of it. I am deeply concerned that you took the bold step of creating a whistleblower report and from your report you did this based on the fact that it would be confidential. But Chairperson Dr Ben Ngubane, unknown to you, released it to the entire board. Is that what happened?

Mr Masango: Yes.

Chairperson: Please let him say he agreed and let it be recorded.

Ms Mazzone: Okay, we agree that that was what happened, Chairperson, it’s up to you. You have to say you agree for the record.

Mr Abram Masango Yes, I agree for the record and I can substantiate it. I did not email the report. I hand delivered the report to Dr Ben Ngubane’s office then he calls me and says he has read it, thanked me and he said would act on it. The same day I had arranged a meeting with the Chairman of the People and Governance Committee. And when I got to the meeting, she says I do not need to say anything that she knows everything and the Board is meeting now and everything would be dealt with. I made an assumption that all members of the Board had seen the whistleblower report.

Ms Mazzone: We can deduce from your testimony that Dr Ngubane sabotaged the work that you were trying to do as a whistleblower, exposed you and also put you in danger.

Mr Masango: I will answer it in two ways. One you are 100% correct but on the other hand if Dr Ngubane had handled the report in the right manner, a lot of wrong things would have been avoided.

Ms Mazzone: In your report you testified that your relationship with Mr Koko was on the right track but in 2016 your relationship began to sour. What specifically occurred that caused the souring of this relationship?

Mr Masango: As I indicated I was responsible for the project. What disturbed me was that when my team in different projects would prepare a submission for different transactions and present it to EXCOPS (Executive Procurement Sub-Committee) which is the level below the Board Tender Committee. The EXCOPS was made up of the members of the EXCO which I was not part of but I could get called to further clarify the transactions the team presented. I observed that my team had two submissions that went through the levels of EXCOPS. Although Mr Koko was a member of EXCOPs, he never attended the meetings. I noticed that Mr Koko would go and remove the submissions of my team from the Board Tender Committee, hence I was unhappy. I was unhappy because if you lose time in a project it costs more but he never told me the reason. I was also surprised that the members of the Board Tender Committee allowed him to take the documents submitted. At this point I knew something was going on and the relationship started dwindling. I thought that this was a sabotage effort because the more the delay, the more the costs to the project.

Ms Mazzone: In a lot of reports the Committee has read we see that the Kusile project was behind in timelines and a lot of blame is being passed on to you as head of the operation. At any time during your tenure at Eskom where you asked perhaps to avoid a certain tender, look positively at a certain tender, deal with certain companies that you were not happy to deal with in the Kusile project.

Mr Masango: No, I was not asked. I cannot remember any specific request that I must work with any particular company.

Ms Mazzone: In terms of what you have just told the Committee about the souring of your relationship with Mr Koko, could it be possible because you said that certain documents were removed. Please state if the tender process was not as transparent as it should be because it sounds strange to me that certain documents were removed at the last minute. My assumption is that you remove documents at the last minute so that the tender process is not transparent.

Mr Masango: One of the submissions that was presented was when the "tenure edge dam" (2.03 20-2.03.26) was being built and the team recommended that the same contractor that built the first phase must build the second phase. In doing this the team was going to save more than R1 billion because remember that at some stage Eskom did not have schedule certainty. This was a concern but we managed to get the schedule certainty. After we achieved this, our concern shifted to the cost of the project. The main focus was to save costs as much as we could on this project because the costs kept on escalating. Recall that the Kusile project had a cost of R160 billion and we saved R4 billion and Medupi project had a cost of R145 billion and we saved R10 billion. So that was the strategy to try and save as much as possible.

The submission that Mr Koko removed ended up in Mr Brian Molefe’s office because I told him that removing the document would cost Eskom double because of the delay. I told Mr Brian Molefe in a meeting that Mr Koko was supposed to sit in the EXCOPS meeting to raise any concerns before the tender moves to the level of Board Tender Committee. Hence if the executive is concerned it should be stopped there instead of allowing it to move to the level of Board Tender Committee because it results in lost time. Mr Brian Molefe stated that any issues on the transactions should be sorted out but Mr Koko did not agree.

I went back to my team to tell them that the best thing to do was to allow the transaction to go through open tender. One of the reasons that Mr Koko gave was that National Treasury would not approve the submission. I told him that it was okay to take it to Treasury and if Treasury agrees that we need to pay more, Eskom would pay more but with the way the team has presented it, we could actually save more money. As of now I know that Eskom is paying R800 million more than the initial cost. The other contract documents that were removed was for contract cabling that was contracted to Siemens but sub-contracted to an Eskom subsidiary, Rotek, which had performed well earlier. The decision was taken to subcontract the cabling contract to the Eskom Rotek company because they had performed but Mr Koko refused and said it must be awarded to ABB Group. At a later stage I learnt that Impulse international was sub-contracted by ABB, I did not know initially. I just wanted Eskom to use its own staff on this project because they had performed earlier. I did not know if this was the reason Mr Koko insisted on giving the contract to ABB.

Ms Mazzone: I want to get it on record that you found out that the contract was awarded to Impulse international, which had Mr Koko’s stepdaughter as a director, as the preferred company for the contract instead of Eskom’s in-house company that you knew had the capability to do the contract.

Mr Masango: Yes, Chairperson, I am saying that ABB sub-contracted Impulse International.

Ms Mazzone: I’m sure you know the reason the meeting at Melrose Arch is important. When you went to Melrose Arch who in your understanding was going to be at this meeting and who was at the meeting.

Mr Masango: In my understanding I went to have a meeting with my boss Mr Koko who had been on leave. I was never informed that there would be a third person at the meeting. When I got to the meeting I met Mr Koko, my boss, and then he introduced me to Mr Salim Essa. Mr Koko began to tell me what was going to happen but. I did not know Mr Essa at the time and he did not say anything. Mr Koko was telling me what was going to unfold.

Ms Mazzone: Please confirm you got to the meeting and after Mr Koko had told you what would unfold, Mr Salim Essa starts to give you instructions?

Mr Masango: If you call it instructions I would not disagree. What Mr Essa said was you guys must fix the contracts at the project because it’s a mess and the public is complaining. So I took it that it was a positive comment because it was public knowledge that the cost of the project was escalating.

Ms Mazzone: Did it strike you as unusual that someone like Mr Essa whom you had not met before would be at a meeting like this. You said you were just introduced to him and you had not met him before. Did you know where he was working and why he started giving you instruction? It must have being unusual because you are the professional. Why would this person give you instructions? Did you know where he was working? You have got someone you had just met telling you that what you were doing was wrong.

Mr Masango: I think for me it was not unusual to be called for a meeting and I took it as one of the meetings. It was later when I heard about Trillian that I began to understand what was happening. I must also indicate I made an assumption that Mr Koko being my boss would not do anything that was untoward.

Ms Mazzone: Please state at any time in your employment at Eskom were you asked to meet with the Gupta or Zuma family or anyone that you can think of that you should not have been meeting?
Mr Masango: No. Specifically the people you just mentioned I was never told to meet any of them. But I must indicate that from time to time people come and are sent to me if I am the relevant person and I would meet with them. The specific people you talked about I never really met any of them.

Ms Mazzone: I will rephrase my question. Did you meet with any of them?

Mr Masango: No, I did not meet with the Gupta or Zuma family.

Ms Mazzone: In your testimony you said Mr Koko removed documents at the Tender Board Committee stage. Please state if Mr Anoj Singh the CFO was involved in the cost saving mechanisms on projects? Did you deal with Mr Anoj Singh on project cost saving mechanisms? Surely the CFO Mr Anoj Singh would have being involved in cost measures of up to R1 million.

Mr Masango: I got the CEO Mr Brian Molefe and the CFO Mr Anoj Singh involved in the cost saving mechanisms. Both the CEO and CFO knew about the efforts at cost saving because I was comfortable with the new schedules but I was not comfortable with the escalating costs.

Ms Mazzone: Given what you know now, what you leaked, what is leaked to the media, and the plenary hearing, your suspension, that you have worked on massive projects, do you think Eskom is a state capture entity?

Mr Masango: Yes, if we look at things now, state capture is a reality at Eskom because even the processes of Eskom were flouted. However, I am happy that it was stopped before it really got bad. I know Eskom can be fixed with the right people. There are good people in Eskom and those good people have to be kept because Eskom brings a complex organisation; it needs those good people to help fix it. If new people are recruited it might not be fixed, it needs two to three years to get back on track. My advice is that the processes in Eskom are good ones; they should not be tampered with. They should be allowed to unfold and the parameters in this governance framework should be allowed to unfold.

Ms Mazzone: I am disturbed that you have been threatened and you felt unsafe. I feel almost reluctant to ask you this question but I must ask you. In your opinion who allowed state capture to happen in Eskom and who should face the full might of the law?

Mr Masango: This is a very dicey question but I would share my observation and my opinion. At I time I thought officials that had been put in place to account were not performing well and the chain needed to be broken. It was only this Committee that was only this Committee that assisted with the investigation. In the past I thought that people who wanted Eskom to be a better place where followed because I observed that staff that wanted the good of Eskom were reported to Board members. At the time I wanted to resign because the people you thought could assist were part of the system. I was advised not to resign but this compromised my safety and it fell on family and friends. Probably on Eskom Board, one or two members were not involved but I do not believe that the Minister was not involved. At the time, I wanted to resign but I was advised not to hence my safety was compromised. I am happy that Eskom has a new Board that will investigate the matter fairly.

Chairperson: As a follow-up on questions from Ms Mazzone, where you shocked or afraid during the meeting at Melrose Arch?

Mr Masango: Yes, in my entire life I never had any meeting where my phone was taken so I was shocked at the turn of events at the meeting in Melrose Arch. At the meeting I heard about four executives that would be suspended and there was no reason. I was sure that I would get reasons for the strange turn of events from Mr Dan Marokane. Also, it was strange that when I was at Megawatt Park with Mr Koko, he never told me anything; only for Mr Koko to call me back after I had left. The situation falls back on the family.

Mr S Swart (ACDP): I am concerned that you have been threatened and I commend your courage for coming forward to the Committee. You were supposed to be protected according to the Whistleblower Act but you were not. Instead you were prejudiced and suspended. Indeed I want to thank you and other witnesses but it is of great concern that you were threatened. Please state if you have received any further death threats in recent times?

Mr Masango: Recently, I have not observed anything but measures I put in place for the safety of myself and my family are still there. I have had to switch off my phone sometimes. Sometimes I have thought was it worth it. Towards the end of 2016 and in 2017 it has been a nightmare. Mr Koko wanted to side-track me while still working by forcing me to attend Harvard University training. Also he also wanted me to attend training in London but I resisted. Ms Suzanne Daniels has been attacked in her home hence most of the employees are afraid to come and testify.

Mr Swart: The Committee should note and investigate the circumstances of Ms Suzanne Daniels’ attack and confirm the intimidation against Eskom staff.

Chairperson: I agree with you Mr Swart.

Mr Swart: Also you were not happy when you were called by the Board to testify against Mr Koko at a sham hearing to look into why Mr Koko should not be suspended?

Mr Masango: Earlier on I talked about the things that happened in 2016, including muggings and photos taken at restaurants. For me, I could see the direction where these things were coming from. One of the reasons I did not want to testify at the sham committee hearing was these hearing had a pre-determined course of action so what was the point of appearing.

Mr Swart: That was Ms Daniels’ testimony as well. I would like to take you to the meeting at Melrose Arch on 11 March 2015. Is it correct that Mr Koko was nervous at the Melrose Arch meeting?

Mr Masango: Yes.

Mr Swart: You indicated in your testimony that it was strange as Mr Koko had been with you at Megawatt Park. Why would he want a meeting with you at Melrose Arch when you had been with him at Megawatt Park. And you did not know that you were going to meet a third party Mr Salim Essa at that meeting in Melrose Arch. Is that correct?

Mr Masango: Correct.

Mr Swart: We know now that Melrose Arch was a Trillian business premises. Also Mr Salim Essa is a runner for the Guptas who are part of Trillian. Are you aware of that now?

Mr Masango: That is what I am aware of now.

Mr Swart: With all what we know now, are you shocked about what you are learning about Mr Essa?

Mr Masango: Yes, I was shocked. Although I did not know at the time that Mr Essa and the Guptas were part of Trillian.

Mr Swart: During the meeting you should have thought that what Mr Essa was saying was not in the best interest of Eskom? That another person although you were in the presence of your boss was giving instructions to you. You said Mr Koko is a runner because he was getting instructions from Mr Essa and the Guptas. So would you say that Mr Koko is a runner to Mr Salim Essa and the Guptas?

Mr Masango: Yes, I said that he seems to be a runner when I was answering the question. I thought at the time that he was a runner to someone – at that time I could not say.

Mr Swart: Would you say from your view he was getting instructions from someone.

Mr Masango: Yes, at that time I thought he was a runner to the Board.

Mr Swart: What do you mean that he was a runner to the Board?

Mr Masango: I mean why the Board would be so interested in what happened to him.

Mr Swart: This old Board was Gupta aligned based on evidence. The new Board has pointed to this fact. The Committee has evidence that Ms Suzanne Daniels attended a meeting with Mr Koko at a restaurant and she was taken to Melrose Arch on 9 March 2015. At the meeting, the same discussion you had was played out by Mr Essa in the presence of Mr Koko. The only difference from your discussion was that you were not asked anything about the process. Ms Daniels provided the legal processes that would be followed in a disciplinary action. In the presence of Mr Koko she was then told of the suspension of the four executives which was exactly what happened in your meeting. It seems to me that the meeting with Ms Daniels took place a day before your meeting? It might be difficult for you to comment but I think this meeting really happened.

Mr Masango: I am not sure. It’s for the Committee to decide.

Ms Swart: With what happened to you at the Melrose Arch meeting, the damage to Mr Molefe’s career because he did not want to sign a contract, getting rid of the Minister and the pattern is being repeated as good employees are being removed. Do you see the pattern of state capture on a grand scale?

Mr Masango: Yes, I agree.

Ms Swart: Have law enforcement agencies approached you to cooperate with them following your whistleblower report?

Mr Masango: No, I have not been approached.

Ms Swart: The Committee should note that Mr Masango has not being approached yet. To me this was a serious whistleblower report that was not followed up. I think you would be able to share your experience with any law enforcement agencies.

Mr Masango: I have no reason not to explain what I have experienced.

Ms Swart: Eskom is faced with a lot of financial challenges largely because of the award of contracts to companies that are not competent. Coal supply in Eskom is being threatened. Do you agree that there is a chaotic situation in Eskom where contracts are given based on affiliations?

Mr Masango: Yes, I agree and it needs urgent attention. The problem is that Eskom is a complicated company and the chaotic situation that you have been explaining has got repercussions. The repercussions might not be seen immediately but would creep in gradually.

Ms Swart: Where you appointed in the role of acting Group Capital Executive?

Mr Masango: Correction, I was appointed as the Group Capital Executive to oversee all the projects.

Ms Swart: Who took over from you?

Mr Masango: When I was seconded to the Office of the CEO, Mr Prish Govender took over from me.

Ms Swart: Please confirm Mr Prish Govender was appointed in the role of acting Group Capital Executive after you were seconded?

Mr Masango: Yes, that is correct after I was seconded to the Office of the CEO.

Ms Swart: The Committee has evidence that Mr Prish Govender was indicted, you do not have to comment. You were forced to go on training at Harvard University in April 2015. You were told to go in March 2015 but you refused. Why was it so important for Mr Koko to get you to Harvard University for training?

Mr Masango: It was planned that I was supposed to go to Harvard University for training in September 2017 but I was forced to go in March 2015, that’s why I refused. I do not know why I was being forced.

Ms Swart: Was it because you were being prepared to be appointed for the role of CEO or because someone wanted you out?

Mr Masango: I will put it you that I applied for a position and I was interviewed. However, I do not know if the recruitment agency has given the results of the interview to the Board and to the Minister.

Ms Swart: So it would be difficult to have you out of the way. What is your opinion on that?

Mr Masango: I don’t have a comment.

Ms Swart: Thank you.

Mr R Tseli (ANC): Let me join my colleagues in appreciating your courage to assist the Committee with its investigations. Please confirm the Business Day 4 July 2017 report that the R4 billion tender to replace power station Duvha's damaged boiler was awarded a few days after you were suspended, despite the concerns you raised?

Mr Masango: Yes. Eskom’s evaluation process is very intricate based on stringent criteria on technical, safety and finance evaluations. This evaluation led to a shortlist of two companies that were sent to the Board who decide on which company to choose. Subsequently, I was shocked when the Board asked the team to negotiate with all the companies that presented tenders. Negotiation with all companies that were on the tender was against Eskom strategy. Prior to signing the contract, I requested the auditor, assurance, legal and forensic reports as was the standard because the process had to be verified but I got seconded to the Office of the CEO.

Mr Tseli: Please state if it is true that Duvha’s bid was R1 billion higher?

Mr Masango: Yes, that is correct.

Mr Tseli: Please confirm your suspension was due to ‘undeclared conflicts’?

Mr Masango: Yes. Through my lawyer Eskom has never laid any charges until today except that the contracts that passed through the Board Tender Committee contravened Eskom policies. However, I have never passed any contracts that contravened Eskom policies to the Board Tender Committee. It was only today that a charge sheet was forwarded to my lawyer. I indicated to the Committee that I just received it today. I will liaise with my lawyer on this.

Mr Tseli: The press conference that was convened after the four executives were suspended, who addressed the press conference and what was said to the media?

Mr Masango: The press conference was addressed by the Board chairperson Mr Zola Tsotsi, saying four executives were suspended, certain investigations were going on and it must not be interrupted.

Mr Tseli: You have heard about the Durban meeting that Members and the evidence leader have talked about. Do you think there is something in common with all that has happened?

Mr Masango: Yes, there is a link.

Mr Tseli: When you met with Mr Salim Essa at Melrose Arch he made some comments. Why where you not worried that a person who was not an employee of Eskom was making such comments?

Mr Masango: At the time the issues at Eskom were common knowledge and it was known that Eskom was running behind schedule and costs were escalating on projects. I was not suspicious because his comments were good based on the current happenings.

Mr Tseli: What is the relevance of the document Annexure C on page 28 to this discussion?

Mr Masango: The document is addressed to Dr Ben Ngubane and it is identified as the whistleblower report.

Mr Tseli: Do you know anything about the two page corporate plan that cost R20.6 million?

Mr Masango: No, I do not know anything about it.

Mr Tseli: What is your role in the Mr Koko investigation?

Mr Masango: Mr Nkonki asked me about the whistleblower report but at the time I told him that I did not know anything although I told him I know the contents of the report.

Ms G Nobanda (ANC): Please state the period of your secondment to the Office of the CEO. Was it before or after the forced study leave to Harvard University for training?

Mr Masango: The secondment was during the period of the forced study leave to Harvard University for training.

Ms Nobanda: What was the role of General Martins and General Rakau?

Mr Masango: General Martins was responsible for security while General Rakau was assisting with liaising with Eskom operations in African countries and other countries.

Ms Nobanda: It seems as if you are confused on the date of Melrose Arch, what was the date?

Mr Masango: In my tracking of the sequence of events it is 11 March 2015.

Ms Nobanda: After you received all the threats, did you report to the police?

Mr Masango: No. The threats were mere information that lacked evidence. Until you have solid evidence through photos or if you can identify the parties involved, it was difficult to report to the police.

Ms Nobanda: Please take the Committee through paragraph 5.8 on page nine – the section where Mr Koko was trying to sabotage your position?

Mr Masango: I formed the position that Mr Koko wanted to sabotage the efforts of synchronising the Kusile unit in December 2016 because the quicker the synchronisation of the units, the more costs could be saved. Mr Koko said the synchronisation should be postponed till March 2017. Also Ingula Unit Three had delayed commercial operations until January 2017. All that was on my mind was to save costs so it crossed my mind that I was being sabotaged.

Ms Nobanda: You are saying the more the machine was on, the more the contractors stayed on. Do you know any of the contracting companies?

Mr Masango: Yes, I know all of them because I oversee contracts.

Ms Nobanda: Are you aware if Mr Koko has any relationship with the contractors? If you have to keep something on it means you are making a way for the contractors to make money.

Mr Masango: No, I am not aware.

Ms Nobanda: Are you aware of any investigation that is being conducted by Eskom apart from your suspension?

Mr Masango: Yes, I’m aware.

Ms Nobanda: Please take the Committee through paragraph 6.12 page 14 pertaining to the affidavit?

Mr Masango: Mr Koko’s lawyers produced an affidavit that contained serious allegations against me and various other persons including Mr Frans Hlakudi, Mr Mzilikazi Wa Africa, Mr Peter Sebola and a certain Collen Maine.

Ms Nobanda: This Collen Maine, is he the president of the ANC Youth League?

Mr Masango: I can’t confirm.

Mr Tseli: You can’t ask Mr Masango to make such confirmation.

Chairperson: Please do not defend Mr Masango. He was the person who mentioned the name hence he has to answer to the question. It was what was on my mind when he was answering the question.

Mr E Marais (DA): Do you suspect that there was interference in the tender process during your employment at Eskom?

Mr Masango: No, I am not aware of interference in the tender process during my employment at Eskom except for Duvha 3. The Duvha 3 contract award was the award I found questionable but it was signed after I was suspended.

Mr Marais: What is your opinion of Dr Ben Ngubane?

Mr Masango: I must say that that I believed in him. That was why I spoke to him when he heard I was very upset. I told him what was happening and he told me to write about the wrong things and that was why I prepared the report.

Mr Marais: Would you say there was an underlying message given to you during the ten minute meeting at Melrose Arch?

Mr Masango: Yes. If I look back now I can say so.

Ms L Mnganga-Gcabashe (ANC): Mr Masango you have grown through the ranks from Project Director at Kusile Power project to the position of Group Executive of Group Capital at Eskom. Please give the Committee a breakdown of the procurement process at Eskom? Also where is the procurement/supply chain branch located in Eskom? Is it under a particular division, the CFO or a branch?

Mr Masango: Procurements in Eskom at the moment is under the CFO, but at the time it was combined with technology, it was called the Procurement and Technology division which was led by Mr Koko who reported to Mr Dan Marokane.

Ms Mnganga-Gcabashe: Please clarify, when Mr Anoj Singh was the CFO, were procurements under him?

Mr Masango: Correct, the procurement department was under Mr Anoj Singh.

Ms Mnganga-Gcabashe: Please break down the procurement process?

Mr Masango: Eskom has the Board Tender Committee (BTC) which presides over submissions above R750 million, EXCOPS presides over submissions below R750 million, the Provisional Tender Committee presides over contracts below R100 million. We also have a committee that presides over contract below R100 million. The BTC is comprised of members of the Board but EXCOPS recommends tenders to the BTC. Each procurement is presided over by the different threshold levels. The procurement process starts with drawing up a strategy, then it goes through a tender and a recommendation is made. Then the particular threshold committee approves the procurement. It could also be a sole source then it is evaluated. The evaluation step is a critical step. It involves technical, safety, quality assurance, financial or procurement evaluations. When the tender comes in, it is separated, evaluated and considered. Then a recommendation is made and it goes to the relevant committee.

Ms Mnganga-Gcabashe: I just want you to confirm if the CEO and CFO sits on the BTC?

Mr Masango: The CEO and CFO do not sit on the BTC.

Ms Mnganga-Gcabashe: Does the CEO and CFO sit on the EXCOP tender committee.

Mr Masango: They do not.

Ms Mnganga-Gcabashe: I want to confirm the supply chain structure. Please state if Eskom had a Bid Specification Committee?

Mr Masango: No, the Engineering division prepares the scope and sends it to the Procurement division. Then each division such as safety, technical quality assurance and financial evaluation committees prepare their reports, then Procurement consolidates these and it comes out with one report.

Ms Mnganga-Gcabashe: Mr Masango, at what stage do you advertise a tender?

Mr Masango: Eskom advertises once it has presented a relevant strategy to the appropriate committee. The committee would approve, then the procurement people take it to the market.

Ms Mnganga-Gcabashe: You talk about the lowest tender amount – that it does not get advertised. Do you have a quotation on the tender in newspapers, notice boards, publications, tender board or on the website? Please explain do you advertise for quotation even though it’s on a tender board?

Mr Masango: Apologies, if it did not come out correctly. It’s the same process if the strategy says go out on open tender even if its R1, it goes on the Eskom tender board, newspapers etc. but if it is a sole source you justify it to the committee.
Ms Mnganga-Gcabashe: Explain sole source to the Committee because challenges have been noted on coal supply. How do you identify a sole source for coal? It has been observed that there has not been an open tender on coal for 40 years.

Mr Masango: It is done when you identify that a product can be sourced from only one company. The documents are then prepared and negotiations are carried out.

Ms Mnganga-Gcabashe: In paragraph 5.5.1 you testified that Mr Koko gave instructions to Frans Sithole, a Project Director at Kusile, to remove Senior Manager for Contract Management, France Hlaukudi, a Project Manager for a consultant company at Kusile, Gopal Kambi and a company called GTC from the Kusile project.  How was that possible?

Mr Masango: The tender was done differently to pursue specific services through an open tender. Eskom got a shortlist of panels that could provide specific professional services. The services were spread evenly among the companies. The professional must work with any company listed in one of the panels.

Ms Mnganga-Gcabashe: What is the name of the company?

Mr Masango: It is called Tata. Tata was providing project management services.

Ms Mnganga-Gcabashe: What kind of services was Tata providing?

Mr Masango: It was providing project management services.

Ms Mnganga-Gcabashe: What was the reason given to remove the professional? I remember one of the Members said the project was behind time, is that correct?

Mr Masango: When I was instructed to remove the listed I did not see the reason why. I was suspicious but because Mr Koko was my boss, we could not do otherwise. I did call the project manager and told him we could investigate why the consultants had to be removed after we carried out Mr Koko’s instructions.

Ms Mnganga-Gcabashe: What was the duration for this consultancy service?

Mr Masango: I can’t remember the duration right now. You are 100% correct normally when you appoint a consultant there must be duration. This particular consultant was removed before the project ended in this case.

Ms Mnganga-Gcabashe: So the removal of the consultant could not be linked to a project being behind time?

Mr Masango: No, it was not linked to time frames. In actual fact one of the reasons we brought the consultants from Tata was that a similar project was built in India within 36-48 months. Hence Tata was in the panel as much as Eskom had other companies in the panel. Eskom also managed to source some of Tata’s services because if it managed to build a similar project faster, why could it not do the same for Eskom. We employed Tata to fast track the delivery of the project.

Ms Mnganga-Gcabashe: So what was the duration of the project? From the start to the end of the project was it one, two or three years?

Mr Masango: Eskom had so many timelines hence there was a public outcry. When Eskom started the project it was informed that a project like Kusile power project could be completed within 48 to 56 months. After Eskom started, it realised that it took nine to ten years to build a project of Kusile’s magnitude. The difference was that Eskom took one year to plan while other companies overseas took four to five years to plan and they built in four years. Medupi power plant was planned in a year and it was built in eight years. That is why the project becomes a bit more costly because the planning was insufficient. So the biggest mistake that Eskom made was not to spend enough time to do the planning. If the duration of the project was compared to other projects of the same magnitude, the duration is eventually the same. It’s just the phases, the planning, the manufacturing, the construction and the commission phase respectively, that is what eventually differs.

Ms Mnganga-Gcabashe: So would you say the lifecycle of a project can stretch from three to five years. Is that your understanding?

Mr Masango: No, I’m not saying that. What I am saying is that a project of the magnitude of Medupi could take 48 to 56 months to build.

Ms Mnganga-Gcabashe: That is four years to five years?

Mr Masango: Yes. But upon the execution, when Eskom found out that the dates were not achievable then it decided to go back to the planning phase which took Eskom nine years. It includes the planning stage which could take three to five years.

Ms Mnganga-Gcabashe: Three to five years to plan only?

Mr Masango: Yes, remember the planning includes the design.

Ms Mnganga-Gcabashe: I understand. I have a problem with that but let’s go on.

Mr Masango: Yes.

Ms Mnganga-Gcabashe: You said you were asked to terminate the services of a sub-contractor, GTC Company without any reason given. My question is who was the main contractor that the sub-contractor GTC Company was sub-contracted to?

Mr Masango: The sub-contractor GTC Company was contracted to Tata. As I explained earlier I called Tata and explained that this was the situation Eskom was facing but I would investigate to get the details.

Ms Mnganga-Gcabashe: So Tata was given two types of contracts built in one contract. Tata was given a contract for project management and it was also a main contractor. Tata being a main contractor brings in project construction supervision and does all in one, is that what you are saying?

Mr Masango: Yes. Unfortunately that was the status. In this projects you would find that the main contractor is providing the design, manufacturing, construction and commissioning of a certain system or component and within that you would find sub-contractors working under the contractor.

Ms Mnganga-Gcabashe: That was where the problem started. The Committee should observe that the same thing affected Human Settlements projects where a particular contractor is in charge of everything and could not account for the project at the end of the day. If main contractors are part of the project management and project construction and it tenders for items and has to give it to the sub-contractor to actually carry out the construction, then there will be challenges. The Committee should look into this as it continues its work.

Mr Masango: Eskom has a contract with the main contractor. That is the party Eskom holds accountable.

Ms Mnganga-Gcabashe: It is funny that Eskom should say to its staff terminate the services of a sub-contractor because it has no powers to terminate the services of a sub-contractor. If anything is wrong it is the main contractor that has an agreement with Eskom that needs to be terminated or cautioned, not the sub-contractor. Eskom has no right to terminate the sub-contractor. There is something fishy here.

Mr Masango: We are on the same page and that’s why I stated to get suspicious of Mr Koko’s motives. Your analysis is correct that was why I became suspicious.

Ms Mnganga-Gcabashe: The construction managers at Eskom are they in sourced or out-sourced? Do they come with the main contractor or are they staff?

Mr Masango: They come with the main contractor but Eskom also has its own construction manager that oversees what the contractor is doing.

Ms Mnganga-Gcabashe: What was the position of Mr Zethembe Khosa who was in Eskom during Dr Ben Ngubane’s tenure? You said something about a Mr Zethembe who influenced some people and told Dr Ngubane that the report you submitted was not right and you must be suspended. What was the position of Mr Zethembe Khosa at that time during your submission of that report and your suspension?

Mr Masango: Mr Zethembe Khosa was a board member and he was also the chairman of the Board Tender Committee.

Ms Mnganga-Gcabashe: In your testimony you said you wrote another letter to the new Board. You also said you received a letter this morning although you did not indicate if it was from the CEO or the new Board. The Committee needs to clarify the contents of the letter. Please let the Committee know if it is confirming your suspension, calling you to face a disciplinary committee or is re-instating you back to your position at Eskom.

Mr Masango: I will confirm from my lawyer. I was just told this morning. What I will do after my lawyer confirms it, is ask the lawyer to send it to the Committee.

Ms Mnganga-Gcabashe: Thank you.

Chairperson: The Committee needs to confirm what the letter says, if it’s coming from the new Board or old Board. There are executives at Eskom who are still acting as if they are still working in Eskom. What Ms Mnganga-Gcabashe noted about procurement policies at Eskom during her dialogue with Mr Masango needs to be clarified by the Committee. Some of the Eskom policies makes the Committee begin to wonder because it does do not follow government policies or legal documents on how to award contracts. Hence, the Committee needs to clarify the procurement processes and policies at Eskom. Please explain why Mr Rakau and Mr Martins are referred to as Generals.

Mr Masango: They are referred to as Generals because they retired as Generals from the South African National Defence Force.

Chairperson: Now I understand I thought it was just managers that had been given the titles of General. I appreciate the contributions of Members and Mr Masango during the Inquiry. Mr Masango has made some allegations against prominent people at Eskom that the Committee needs to investigate. The Committee will give the information you have given to the relevant authorities. Maybe they would contact you for assistance. Mr Masango, thank you for giving the Committee information it never has received before. As I stated at the beginning of the meeting, the Committee would be having a short meeting and it requests that the media leave while it has the meeting.

[Meeting closes to the public]

After the short closed meeting, the Inquiry Chairperson indicated that during the short meeting the Committee had resolved the focus areas of its next meeting on Tuesday 6 March 2018. It would investigate personal testimonies, seek legal advice on Ms Dudu Myeni and write a letter to Ms Myeni to appear before the Committee, failing which the Committee would send her a summons.

The meeting was adjourned.

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