Eskom Acknowledges R3 Billion in Irregular Diesel Payments Amid Ongoing Controversy

Eskom has come under fire after revealing that it made R3 billion in irregular payments linked to its diesel supply contracts, part of a broader investigation into R21 billion worth of these agreements. The power utility's admission, detailed in a press release on August 27, 2026, comes amidst allegations regarding the mishandling of funds and operational pressures faced during a critical period of load shedding.

Despite acknowledging these payments, Eskom stopped short of labeling them as prepayments, instead opting for terms like 'advanced payments' and 'payments outside of contractual terms'. These transactions primarily occurred between January and April 2025, when Eskom was grappling with severe load shedding, which necessitated rapid operational decisions. CEO Dan Marokane emphasized the challenges faced but reiterated the importance of adhering to governance protocols.

The utility indicated that past practices of prepaying suppliers were intended to mitigate supply shortages. However, questions arise regarding the decision to channel these payments to three lesser-known suppliers, who struggled to meet the demands for fuel. Eskom's statement suggested it was trapped between ensuring fuel supply and risking extended load shedding. Yet, amaBhungane's investigation indicates that these prepayments did not guarantee a reliable diesel supply to the Ankerlig power station.

Internal communications from a high-level meeting in February 2025 reflect frustration with supplier performance, with Eskom's head of generation, Bheki Nxumalo, expressing dissatisfaction over the slow delivery of fuel. Despite having already made multiple prepayments, the situation did not improve, leading to further payments to Severino Industries of R379 million and R473 million.

Eskom also revealed it had identified R38 billion in irregular expenditure from prior diesel contracts, which ended in December 2024. Although the utility stated that no financial losses were found, it has referred these matters to its Group Security & Investigation team for further inquiry. Both irregular payments from current and previous contracts have been reported to auditors and the National Treasury.

A curious aspect of the situation is Eskom's evolving stance on the delivery of diesel. While initially stating payments should be made after diesel is in storage, the utility now accepts payments for fuel that is merely 'available on demand'. This change raises concerns about adherence to contractual obligations and the legitimacy of the tender process, particularly as Eskom previously hinted at disciplinary actions against employees for procurement breaches—a statement now absent from recent communications.

Source: www.dailymaverick.co.za