André de Ruyter, the head of South Africa’s power monopoly, illustrated the high level of criminal theft in the country’s energy supply by explaining how organised gangs would swap out truckloads of coal for delivery and replace them with low-grade rocks.
An apparent attempt last month to assassinate de Ruyter, the head of Eskom, whose drink was allegedly spiked with cyanide, brought home the huge challenges he has faced in rooting out such corruption.
“There are jammers operating that caused this truck to literally disappear off the radar,” he told the Financial Times in October. “Good-quality coal gets offloaded, discarded coal gets loaded . . . this has a major impact on our energy availability,” he said, explaining how it served to degrade already ageing power plants and so deepened the intense rolling blackouts that plague South Africa’s economy.
The apparent poisoning revealed this week, which took place on the same day in December that de Ruyter resigned from Eskom under political pressure, showed the strength and reach of what experts say are cartels operating within South Africa’s most important state asset.
“Criminal networks are deeply, deeply entrenched in Eskom and have taken control of key aspects of its operations,” said Julian Rademeyer, director of the east and southern Africa organised crime observatory at the Global Initiative Against Transnational Organised Crime. “It’s emblematic of a much bigger struggle in South Africa to combat organised crime.”
Investigations into coal thefts had paid off in November when a number of truck drivers were arrested, disrupting what Eskom called a “highly organised criminal activity” that enabled syndicates to sell the stolen fuel abroad.
But days later, de Ruyter announced his intention to quit after the ruling African National Congress blamed him for failing to fix the blackouts. Later the same day, he became violently ill after being given coffee and had to receive urgent medical treatment, said people briefed on the matter. A case of attempted murder was opened after high levels of cyanide were found in his blood. De Ruyter will remain Eskom chief executive until March and his successor has not been announced.
Lawson Naidoo, executive secretary of the Council for the Advancement of the South African Constitution, warned that if law enforcement did not tackle the syndicates with criminal prosecutions, “de Ruyter would not be the last Eskom chief executive to leave under threats and intimidation”.
This week, president Cyril Ramaphosa told media that he was aware of the deadly danger to those cleaning up the rot at Eskom, which he has called the single-biggest threat to the economy. “I know one manager at Eskom who goes about wearing a bulletproof vest to work, who has two stand-in personal protectors at any given time,” Ramaphosa said.
He insisted that the state would protect those fighting corruption, and that de Ruyter had received the necessary support to lead that battle at Eskom despite his resignation.
But analysts say Eskom’s sheer scale had bred systematic graft. “It’s such a lucrative honeypot that it becomes something where people are not going to readily lose access to their loot,” Rademeyer said.
The company’s power plants are mostly in the ANC heartlands of Mpumalanga province, home to South Africa’s richest coal resources but also notorious for corruption.
Eskom has an annual procurement budget of about R100bn rand ($5.8bn) but breakdowns and the pressure to stem the frequent blackouts have required billions of rand more to be spent on power-plant spares and diesel for back-up generation. The company is heavily indebted, totalling about R400bn, after years of cost overruns on newer power stations as well as chronic mismanagement.
Eskom’s size also made it a target of corruption under former president Jacob Zuma, who “relinquished control” of the utility to allies for looting, an inquiry concluded last year. Zuma has always denied wrongdoing.
Each day, hundreds of coal trucks queue outside Eskom plants that each hold about R1bn in inventory — at least on paper. In one case that de Ruyter was investigating, more than a R1bn in spare parts could not be accounted for at Tutuka, one of Eskom’s worst-performing plants. “When the audit was done, we had to write off R1.3bn at this one particular station because it just wasn’t there,” he said.
Late last year, as blackouts hit their worst levels and South Africans were left without power for up to 12 hours a day, the army was ordered to deploy at some Eskom plants to prevent sabotage. But analysts questioned how far soldiers could prevent wrecking by determined insiders given a lack of police and intelligence work to penetrate the syndicates.
South Africa’s justice system was still recovering from the “catastrophic” collapse in its ability to confront organised crime that ensued when law enforcement was neutered under Zuma to enable looting of the state, Rademeyer said.
Intimidation at Eskom, where people briefed on investigations said that whistleblowers fear to come forward, and in particular the alleged hit on de Ruyter reflect another worrying trend in South African society — the rise of assassination attempts to stop corruption probes.
Murder-for-hire has long plagued South Africa’s minibus taxi industry and competition for positions in the ANC, but whistleblowers, public officials and even police investigators have in recent years been targeted by hitmen.
The pushback against the attempts to tackle corruption at Eskom was at least “a sign that people are looking into places others don’t want them to”, Naidoo said. “They’re getting closer to the source of the syndicates.”