Several media sources and Seeking Alpha are stating that South African investigators this year widened a probe into contracts that Eskom signed with five international firms, including ABB, that were connected to the construction of the Kusile power plants and others that have run far above budget and have yet to be completed.
ABB posted the following on its website:
After a series of negotiations, ABB is pleased to announce that ABB South Africa has reached a full and final settlement with Eskom and the Special Investigating Unit (SIU) in South Africa relating to improper payments and other compliance issues it voluntarily disclosed on the Kusile project.
As part of the settlement, ABB will pay about $104 million or 1.56 billion ZAR to Eskom, and all parties will mutually release each other from any and all claims associated with the Controls and Instrumentation Contract, and its Variation Orders relating to Units 1 and 2 at Kusile.
The majority of the payment has already been recognized in ABB’s financials over the last fifteen months. In the fourth quarter of 2020, there will be an additional impact of about $30 million on operational EBITA and a negative cash flow impact of about $110 million related to the settlement.
Furthermore, ABB will continue to cooperate fully with the National Prosecuting Authority in South Africa, as well as authorities in the US, Germany and Switzerland in their review of the Kusile project. ABB intends to expeditiously close all related pending proceedings globally, the impact of which is currently not estimable.
ABB will continue to serve South Africa as an integrity-minded corporate citizen, contributing to a reliable electrical supply, and is committed to finalizing the Kusile project in line with its contractual obligations.
Tagged with ABB