Eskom: Hey big spender
An Eskom-appointed inquiry by international law firm Dentons shows that the utility failed to obtain meaningful discounts when buying diesel from small companies during its load-shedding crisis
In the three financial years to March 2015, Eskom spent more than R6bn buying diesel from 46 suppliers with whom it had no formal contracts. From these suppliers, many of them pop-up shops created specifically for the purpose of supplying Eskom, the utility failed to use its significant buying power to secure discounts, while it had discount agreements in place with its contracted and established suppliers. Though it had only three contracted diesel suppliers for the period, Eskom turned to these shadowy players, called “supplementary suppliers”, to supply it with 2.6m litres of the fuel, according to the Dentons report, which Eskom has kept hidden from the public. This was part of the electricity utility’s R30bn spending spree on fuel for the two open cycle gas turbine (OCGT) stations that it had to rely on to stave off load-shedding at the peak of its problems. PetroSA, the state-owned converter of natural gas to vehicle fuel, Masana Petroleum and Afric Oil were the more reliable ...
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