MPs unimpressed with Eskom’s wasteful expenditure on accommodation project

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Eskom plans to sell the flats to the Department of Human Settlements

Members of Parliament’s Public Enterprises Committee were deeply unhappy about a fruitless and wasteful accommodation project at Eskom, to the tune of R840 million. Eskom executives appeared before Parliament’s Public Enterprise Committee to brief MPs on various issues.

MPs heard that the cost of a project to provide accommodation for artisans working at the nearby Kusile Power Plant in Mpumalanga rocketed from just more than R260 million to R840 million with no benefit to the company.

The contract was awarded for just over R260 million in 2012 to build flats for artisans working at the Kusile Power Plant. By 2019, with a bill of more than R600 million and nothing to show for it, a decision was made to pull the plug.

Eskom’s head of generation, Bheki Nxumalo, says ultimately the bill came to just over R840 million.

“In 2019, seeing the progress and the initial intention of this flat, the strategy was approved by exco that that project must be stopped and that initially intended benefit was not going to be realised. It’s also prudent to say a whole R840 million was declared fruitless and wasteful expenditure.”

Members of the Portfolio Committee demanded answers to why the matter was not taken to the SIU.  The Group Chief Executive Officer of Eskom, Andre de Ruyter, says they are in talks with other government departments to repurpose the flats.

“ We are in advanced discussions with Human Settlements with the view to make Wilge flats available to distressed communities.  They have confirmed in writing they are keenly interested in pursuing this as an option.”

Eskom seeks to sell Kusile housing project

The  336 units were developed to house workers at the Kusile power station during its construction phase. However, the vision was never realised, but millions were spent.

“Eskom stopped funding the project in 2019 after realising that it was not going to serve its intended purpose. The company is currently in negotiations with the Department of Human Settlements to have it buy the flats and using them to provide housing for residents,” said Eskom spokesperson, Sikonathi Mantshantsha.

National Union of Mineworkers (NUM) claims no knowledge of the project and they want nothing to do with it.

“The workers are not aware of any flats that were constructed to accommodate them. They have traveling allowances as well as housing allowances. They have nothing to do with the flats in question,” said NUM’s Livhuwani Mammburu.

The building is already showing signs of neglect.

If the Human Settlements Department takes over, there will be some work to do before the buildings can be occupied and generate lost capital.

Load shedding

De Ruyter told MPs that they are making progress with a maintenance plan that could see a significant reduction in load shedding by April.

Earlier this month, Eskom implemented load shedding: 

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