High Court orders Eskom to disclose coal, diesel and electricity export contracts

The High Court in Pretoria on Friday rejected arguments by Eskom that some of its crucial contracts are commercially sensitive and should therefore remain under wraps.

It ordered the utility to disclose the following within 10 days:

• Copies of all active contracts that Eskom or any of its subsidiaries has concluded for the purchase, transportation, and distribution of coal;
• Copies of all active contracts Eskom or any of its subsidiaries has concluded for the purchase, transportation, and distribution of diesel; and
• Copies (unredacted) of all active contracts Eskom or one of its subsidiaries entered into with neighbouring countries to provide them with electricity. 

The order comes after civil rights group AfriForum approached the court to review and set aside a decision by Eskom’s deputy information officer Moleka Tshabalala to substantially refuse the organisation’s request for the information in terms of the Promotion of Access to Information Act in September 2022.

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AfriForum tried to follow the internal appeals process, but Eskom never finalised the appeal, and the organisation had no other recourse but to deem the appeal unsuccessful and take the matter on review.

The utility did provide copies of the contracts with neighbouring countries, but they were heavily redacted to the extent that the prices paid by those countries and the identity of the persons representing the parties were completely obscured.

Coal and diesel costs

In the financial year ended 31 March 2023, Eskom spent almost R155 billion on primary energy, largely composed of coal and diesel costs. That was an increase of 17% compared to the previous financial year. 

Coal contracts came under the spotlight in the Zondo Commission of Inquiry into allegations of state capture, and there has been little transparency about the price Eskom is paying PetroSA, its biggest supplier and a fellow state-owned enterprise. 

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AfriForum argued in court that the average price of diesel is widely known, and the public has a right to know how Eskom’s diesel purchases compare.  

Regarding the power supply contracts with neighbouring countries, AfriForum argued that the tariffs Eskom charges for electricity increase substantially yearly. South Africans who are obliged to pay these ever-increasing tariffs must know what Eskom charges these countries and how it compares with domestic tariffs. 

Eskom has an ‘obligation to be transparent and accountable’

The court found that Eskom did not give proper reasons for refusing AfriForum ‘s request. It merely cited the articles of the act that it based its refusal on without explaining why they are applicable in this case. 

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It did not properly substantiate its reliance on the commercial sensitivity of the information and its assertion that it would harm the third parties it contracted with.

This argument was also contradicted by Eskom’s statement that the disclosure would weaken its own negotiating position with such parties. 

AfriForum said in a statement Eskom is one of the biggest and most important state-owned enterprises. As such, it has an obligation to be transparent and accountable about its operations. Therefore, the organisation argues, the contracts must be made public.

Eskom has until 5 April to provide the information to AfriForum – which said it has already started to compile a team of specialised operational and legal experts to analyse the contracts thoroughly over the next few months. If they find any irregularities, they will ask for strict action against Eskom. 

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“South Africans have been carrying the burden of power failures for much too long. Citizens deserve an electricity supply that functions with integrity, not one hampered by corruption and bad management.”

AfriForum said transparency is essential to retain the public’s trust and to prevent corruption and mismanagement. 

This article was republished from Moneyweb. Read the original here