The contracts to build Medupi and Kusile were badly structured, leading to corruption and making Eskom carry the cost of time overruns, Deputy President David Mabuza conceded in Parliament on Tuesday.
"The contracting model did not achieve the objective of maximising local participation," Mabuza said while answering questions in the National Assembly.
"Instead it enabled corruption and looting."
He added that the deals should have been written in such a manner that the contractors suffered the losses accompanied frequent delays in the building of the two vast power plants.
"When they go beyond the time building, they are not penalised but the penalties go to Eskom."