An independent investigation, commissioned by State-owned power utility Eskom, into diesel procurement and storage contracts under Tender MWP2197GX found no evidence that diesel paid for by Eskom is missing.

The investigation did, however, confirm instances of non-adherence to Eskom processes concerning payments made to certain suppliers.

These substantiated findings relate principally to payments outside contractual terms and emergency approvals that did not comply with Eskom’s Delegation of Authority, the utility says.

“Eskom accepts the substantiated findings and is implementing corrective measures,” it adds.

Tender MWP2197GX was issued by Eskom’s Generation Division in late 2023 for the supply, delivery, storage and handling of diesel and related fuels for Eskom’s open cycle gas turbine (OCGT) power stations.

The contracts were structured on a five-year, as-and-when-required basis and covered fuel sourcing, transportation, storage, handling and bulk inventory management.

The contracts were awarded in late November 2024 against the backdrop of significantly improved generation performance. Eskom had, at the time, achieved 310 consecutive days without loadshedding owing to the Generation Recovery Plan.

However, from January to March 2025, a combination of extensive generation unit breakdowns, delayed unit returns from maintenance and constrained pumped-storage reserves, placed a constrained power system under severe pressure, which significantly increased reliance on OCGTs and strategic reserves to maintain security of supply and limit the severity and duration of loadshedding.

Both consumption of diesel and onsite deliveries increased sharply from late January to March 2025, before declining rapidly.

The operating conditions experienced between January and March 2025 were reflected in the rapid depletion of strategic diesel reserves and constrained pumped-storage resources, Eskom says.

During the period leading up to February 1, 2025, available generating hours at Ankerlig, which is Eskom's largest OCGT facility, declined from about 303 hours to about 52 hours within four days, as the station was extensively used to support the power system and limit the severity of loadshedding in a controlled manner.

The decline in fuel reserves occurred despite ongoing replenishment efforts and reflected a combination of exceptionally high diesel consumption, logistics constraints and the broader deterioration in generation performance experienced during that period.

Eskom then implemented replenishment efforts, which resulted in the rectification of the diesel reserves once the fuel deliveries were completed.

Subsequently, available generating hours at Ankerlig recovered to about 250 hours from about 52 hours within two days and to about 300 hours within five days, which restored operational flexibility and rebuilt reserves while the OCGT fleet continued supporting the power system.

The objective was to protect the power system and limit the severity and duration of loadshedding. Maintaining security of supply remained the overriding operational priority, Eskom says.

Advance payments had also been made under the previous fuel-supply contract with major fuel oil suppliers that were in effect since 2019 and expired in December 2024 in urgent operational circumstances. This may have contributed to advance payment being viewed as an available operational mechanism.

However, previous use did not remove the requirement to obtain the prescribed approval or, where action was taken before approval, to complete the required ratification promptly thereafter as per governance processes for handling emergencies, Eskom points out.

The payments made outside contractual terms during early 2025 involve about R3-billion across three suppliers. These matters relate primarily to governance and approval noncompliance rather than missing diesel or financial loss.

Accounting for the fuel does not remove Eskom’s obligation to investigate and address any contractual or approval noncompliance, it states.

“The period between January and March 2025 placed significant demands on the power system and required rapid operational responses and difficult decisions by employees and executives to maintain security of supply and protect grid stability,” says Eskom Group CE Dan Marokane.

“Independent verification processes confirmed that all diesel paid for was delivered and/or accounted for within Eskom's supply chain or contractual terms. However, operational pressures do not diminish our obligation to comply fully with internal controls and governance requirements.”

However, the recurrence of approval and ratification shortcomings across different contractual periods demonstrates that lessons from earlier transactions were not embedded effectively enough in Eskom’s controls and institutional practices.

“Eskom began implementing corrective measures as procedural and governance issues were identified, including by strengthening probity and oversight controls that were suspended in October 2022, which enhanced contract management processes, and initiating accountability measures where warranted,” says Marokane.

“We will continue to act on the investigation's findings, including by implementing consequence management where noncompliance with governance processes has been identified. We will also enforce consistent execution, accountability and monitoring of controls to ensure our governance and procurement processes remain robust, transparent and beyond reproach,” he says.

Eskom is addressing the substantiated findings through consequence management and by strengthening its controls to reduce the risk of recurrence.

“The power system is now in a materially different position from the conditions experienced in early 2025. Improved generation performance and reduced dependence on diesel-fired generation have enabled OCGTs to return largely to their intended role as strategic peaking and reserve resources,” Eskom says.

It remains committed to sustaining the gains achieved through the Generation Recovery Plan, maintaining security of supply, improving governance and accountability, and ensuring that the lessons arising from this matter result in stronger controls and better decision-making, the utility adds.

“Eskom will continue building a resilient and sustainable business capable of reliably serving South Africa, while safeguarding public resources and holding employees, suppliers and other parties accountable where substantiated evidence supports action.”