Eskom Investigation Confirms All Diesel Accounted for

• Eskom's independent investigation into diesel procurement confirmed no evidence of missing fuel paid for by the utility.
• The probe found instances of non-adherence to internal processes, including payments made outside contractual terms and emergency approvals that bypassed Delegation of Authority rules.
• The procurement award process for Tender MWP2197GX was not found to be compromised.
• Eskom initiated the investigation in March 2025 following increased reliance on diesel during operational emergencies and whistleblowing reports.
• Eskom has accepted the findings and is implementing corrective measures, such as strengthening oversight controls and enhancing contract management processes.

While the comprehensive independent verification confirmed that all diesel paid for was accounted for within Eskom's supply chain or contractual terms, the investigation simultaneously identified significant procedural and governance shortcomings.

Eskom has concluded its extensive independent legal assessment, alongside comprehensive diesel reconciliation and verification processes, stemming from an internal investigation into its diesel procurement and storage contracts. The power utility announced that these rigorous independent reviews found no evidence whatsoever that any diesel paid for by Eskom was missing from its inventory or supply chain. Furthermore, a legal assessment specifically focused on Tender MWP2197GX did not substantiate allegations that the procurement award process itself had been compromised.

Despite the confirmation that all fuel was accounted for, the investigation did uncover significant instances of non-adherence to Eskom's established internal processes. These substantiated findings primarily relate to payments made to certain suppliers that fell outside the stipulated contractual terms. Additionally, emergency approvals were granted without complying with Eskom's stringent Delegation of Authority protocols, highlighting critical lapses in internal governance.

The utility initiated this thorough probe in March 2025. This decision followed a period of intense monitoring of contract performance during operational emergencies, which included widespread load shedding in early 2025. Information received through both established reporting channels and whistleblowing mechanisms also contributed to the decision to launch the investigation. To ensure impartiality and thoroughness, Eskom appointed independent forensic investigators and commissioned separate legal, reconciliation, and verification reviews to scrutinize the complex procurement activities.

The contracts under scrutiny, specifically Tender MWP2197GX, were issued by Eskom's Generation Division in late 2023. These agreements were designed for the supply, delivery, storage, and handling of diesel and related fuels essential for Eskom's Open Cycle Gas Turbine (OCGT) power stations. Structured as five-year, as-and-when-required arrangements, they encompassed fuel sourcing, transportation, storage, handling, and bulk inventory management.

When these contracts were awarded in late November 2024, Eskom had achieved a remarkable 310 consecutive days without load shedding, a testament to the success of its Generation Recovery Plan. The prevailing expectation, consistent with Eskom's 2024/25 Summer Outlook, was that load shedding would largely be unnecessary, with any residual risk generally limited to Stage 1 or, in a worst-case scenario, Stage 2. However, the period from January to March 2025 saw a dramatic shift, with extensive generation unit breakdowns, delayed returns from maintenance, and constrained pumped-storage reserves placing the power system under severe pressure. These unforeseen conditions significantly escalated the reliance on OCGTs and strategic reserves to maintain security of supply and mitigate the severity and duration of load shedding.

Eskom's Group Chief Executive, Dan Marokane, acknowledged that the demands placed on the power system between January and March 2025 necessitated rapid operational responses and difficult decisions from both employees and executives to safeguard grid stability and ensure supply. While the comprehensive independent verification confirmed that all diesel paid for was accounted for within Eskom's supply chain or contractual terms, the investigation simultaneously identified significant procedural and governance shortcomings.

The core of the identified issues points to Eskom governance shortcomings diesel, specifically regarding non-adherence to payment processes and compliance with Eskom Delegation of Authority. The findings highlighted that payments were made outside the agreed contractual terms, and emergency approvals were processed without proper adherence to the utility's internal delegation of authority framework. These procedural lapses, while not indicating missing fuel, underscore a need for stricter internal controls and oversight within the procurement and financial management functions.

Eskom has publicly accepted the findings of the investigation and is actively implementing a range of corrective measures. These actions began as issues were identified during the probe, demonstrating a commitment to addressing the identified deficiencies. Key among these measures is the strengthening of probity and oversight controls, which had notably been suspended in October 2022. The utility is also enhancing its contract management processes to prevent future deviations from agreed terms and initiating accountability measures where warranted, ensuring that individuals responsible for the procedural breaches are held to account. This proactive approach aims to bolster the integrity of Eskom's procurement and operational frameworks.

This development signals increased scrutiny on procurement and contract management within South African State-Owned Enterprises like Eskom. Lawyers advising companies that supply SOEs should review their clients' compliance with contractual terms, payment procedures, and internal delegation of authority protocols to mitigate risks of future investigations or disputes, even in the absence of fraud allegations.

Source: Original reporting via independent investigation findings