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* This transcribed interview was the first featured story on today’s Moneyweb@Midday podcast show.
JEREMY MAGGS: Reports earlier this year said criminals were actively sabotaging Eskom’s power stations on a regular basis. Why are they doing this? Well, either motivated by political ends or simply out of spite for being passed over for promotions. This was well articulated by… the former CEO of Eskom, André de Ruyter.
But six months on, it seems the problem is still there. So to what extent, with me now is Calvin Rafadi, who is a forensic investigator. Calvin, a very warm welcome to you. So maybe as a starting point, elaborate for me on the various forms of sabotage that these stations are experiencing and how bad is it?
CALVIN RAFADI: Good day, Jeremy, and thanks for the invite, and good day to the listeners. Yes, indeed, sabotage is very rife at Eskom. So what really happens is you get your thermal power stations, which are coal-fired, and then there are critical areas where we call it C&I [control and instrument] maintenance.
Now, these units, they need to be maintained, but now where the sabotage happens is (when) Eskom is not buying (from) original equipment manufacturers, and some they normally will break the power station or some of these critical components so that they can come and supply extra parts at the end of the day.
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So the time when we had the privilege to investigate one of the power stations, we found on their computers that they collude in asking for three quotations for certain components, so that they break them and then they get someone else to come and supply. So basically, that’s how sabotage happens.
So what really normally happens, it’s procurement-driven and once it’s procurement-driven, even when you can have the best guards outside, you don’t see what happens in the procurement.
So you need to follow the money to get these particular people because the motive is for them to make money, extra money.
JEREMY MAGGS: And Calvin, is it your belief, given that this practice was identified months ago, is it still continuing or is there any control being put in place?
CALVIN RAFADI: Yes Jeremy, it does still continue and then that’s why now we end up having most of the units dysfunctional and then end up in many stages of load shedding. But what I realised, what I can say, is this sabotage also leads to economic risk.
Now, Eskom has come to a point where now they hide the truth about this particular sabotage. Now as we have seen, I think one of the articles that the spokesperson wrote, said no, since the SANDF, they last experienced sabotage in February, which one can say it is not true. But I guess the reason being because it’s economic risk, they want more bailouts from Treasury, and then obviously the confidence of the investors.
Then on the distribution side, they normally will have a problem in eventually Nersa [National Energy Regulator of South Africa] upgrading or giving them higher tariffs.
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So they don’t want to admit that indeed sabotage does happen because when you speak of sabotage, there are critical elements where they must do what we call a tap test, which is critical for them to do this particular test to see that the components are well functioning and they’re meant to run a particular unit. But they normally will do a routine test, just a routine test daily and then the engineers, they must submit the drawings and obviously critical areas whereby they can see fault prior to them breaking or having fatigue.
But the main problem, of which we’re glad they came out, is they said they’re not buying original manufacturer and once you combine such, not being original with the original, you end up having such fatigue. But this will lead to procurement. Somebody is negligent, or even the engineers themselves, I don’t know whether they are accepting this intentionally or unintentionally.
JEREMY MAGGS: Was it a waste of time and money sending in the defence force?
CALVIN RAFADI: Yes, indeed. It was just a waste of money because remember, it was the SANDF [South African National Defence Force] just being troops guarding the outside of the power stations. Then you’ve got Eskom security, of which we heard that they’ve been paid close to R250 million, and there was also other security there.
But that’s why we are saying when you speak of economic sabotage, you need to follow the money.
Let’s follow the invoices of the people who are supplying the parts and you’ll see a lot of shenanigans. Like we picked up in 2019, whereby most of the suppliers, they collude with the people in the procurement to procure the parts and even extra parts and they don’t even supply original parts for the power station.
JEREMY MAGGS: So if you’re saying that the best path to redemption here is following the money, it means that better internal control mechanisms need to be implemented within Eskom. I’m also hearing you say that that doesn’t exist.
CALVIN RAFADI: No, of course it doesn’t because remember, they’ve even got a task team in the organised crime [unit], your Hawks and the like. But it depends what you feed the outside system of the law enforcement. So there are many cases whereby they protect one another in the forensic department or in the legal department.
There are matters that they see that they must see the light of the day. They are sent to SIU [Special Investigating Unit] so that they can get proclamation from the presidency to be followed up but there are those that they just sweep them under the carpet. But what we are saying, if you need to ventilate these things, not with the agenda that we see that is being hidden somewhere, they need to ventilate, and you need people who can follow the money and are even qualified to investigate matters of commercial crimes because that’s where the shenanigans are at.
JEREMY MAGGS: Well, Calvin Rafadi, thank you very much for coming back onto the programme and since we last spoke, obviously nothing is happening. It’s a story that we will continue to follow here on Moneyweb@Midday. Thank you so much.
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