During mid-October, the South African Revenue Service (SARS) conducted a massive intergovernmental search-and-seizure operation across five provinces to break the back of a sophisticated criminal syndicate of alleged coal smugglers, who played a major role in exacerbating the energy crisis and loadshedding from Eskom power plants. The government agency believes that it helped prevent the loss an additional R500-million ($26.6 million), and discovered why the utility’s performance was suffering so much.
The alleged coal smugglers and their related entities were active in Gauteng, Mpumalanga, KwaZulu-Natal, the Free State, and Limpopo. The suspects include former Eskom employees who facilitated procurement fraud, as well as other individuals involved in the diversion of high-grade coal.
Coal trucks destined for power stations were diverted to designated coal yards where high-grade coal is replaced with low-grade or sub-standard product. The high-grade coal is then exported or sold to willing buyers. The low-grade coal is often blended with scrap or other materials and then delivered to power stations. The low-grade coal damages the infrastructure at the Eskom power stations, which is a major factor in crippling the power utility’s ability to generate electricity for the South African grid.
SARS Commissioner Edward Kieswetter commended the country’s law enforcement agencies for this massive breakthrough in ongoing investigations. “It is because of such naked greed that the country has experienced unprecedented loadshedding, which harms business, undermines foreign direct investment and leads to job losses — all of which negatively affect revenue collection,” he said.
Since the beginning of this year South Africa experienced some of its worst blackouts, where homes and businesses went without electricity for more than eight hours a day.