ESKOM is set to lose more than R700million when it disposes of its controversial, multi-million rand residential development project, Die Wilge Flats, in Mpumalanga.
The construction of Die Wilge Flats outside Kusile power station in eMalahleni has taken 10 years and is still incomplete at more than four times the budget. The cost of the project inexplicably ballooned from the budgeted R160m in 2008 to R840m when the project was abandoned in 2019. However, Eskom is in advanced negotiations with the Department of Human.
Settlements, Water and Sanitation as the potential buyer of the 336 flats, for way less than it spent.
Eskom needs every cent it can recoup to plug its debt, which stood at R464 billion by the end of March.
Eskom spokesperson Sikhonathi Mantshantsha admitted an incomplete Die Wilge Flats was a waste of taxpayers’ money.
Mantshantsha said an independent valuation of the property served as the basis of negotiation with the department. “[An] average flat in that area is around R300000. So there are 336 flats, the expected value would be around R110 million. Availing these units to human settlements to house the needy is the most prudent thing.”
Earlier this week, Eskom said it would be selling the flats before the end of September as part of its noncore immovable properties disposal programme to raise more than R2billion capital. The debt-laden power utility has already raised R76.1m in disposing of two high rise office buildings in Kimberley and Johannesburg, while its stands near the Medupi Power Station in Limpopo will also be sold.
The four-storey building housing project was built to accommodate Eskom workers working on the construction of Kusile Power Station.
Instead, Eskom spent millions of rands on alternative accommodation for workers 50km away from the power station, meaning a daily commute. When the Die Wilge Flats controversy became public, Eskom said it would launch a forensic investigation on allegations of corruption and maladministration in relation to the project.
Mantshantsha said some employees who worked on the project were charged with misconduct and disciplined following numerous irregularities uncovered on the project.
He said at least one of them, a facilities general manager, was fired in January 2020 after being found guilty of 13 charges on irregularities related to misconduct on this project.
“Another employee also left Eskom under dubious circumstances, after being charged with irregularities pertaining to this and other contracts.
“Eskom keenly awaits further arrests and prosecutions on the matter, as we do for more than 100 other criminal complaints it has laid with the police over the past three years.”
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