‘Panic spending’: Eskom given over R40 billion in ‘deviations’ by Treasury in last six months

South Africa’s state power utility is burning billions without necessary scrutiny.

The Portfolio Committee on Appropriations heard on Wednesday how Eskom had received R23 billion from the fiscus during the second quarter of the 2024/25 year.

The funding was procured via ‘deviations’, a National Treasury regulation that circumvents the need for a competitive bidding process should the circumstances prove “impractical”.

639 separate payments

The R23.32 billion was the accumulative amount of 639 deviation requests processed in three months.

This emergency funding of Eskom for the last three months adds to the R18.65 billion procured in the same way during the first quarter of the 2024/45 period, bringing the full bill to R41.97 billion so far.

National Treasury Regulation 16A6.4 states that should it be “impractical to invite competitive bids” then the procurement could be carried out by “other means”.

The accounting officer is required to approve and record the request, with the bids able to come from preferred, monopoly or unsolicited sources.

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Leader of Build One South Africa and chairperson of the appropriations committee Mmusi Maimane shared his assessment of the deviations, which dwarfed the next 19 highest amounts for other entities.

“What is transpiring is that due to a government-created energy crisis, the very same government is panic spending to keep the lights on,” stated Maimane.

“[They are] doing so with very little oversight and accountability of said spending,” he said.

The main reason listed for the Eskom deviations was the “ongoing energy crisis”, however, R3.26 billion was given to City Power and R7 billion was paid to a pump and valve company in two separate lots.

Celebrating 200 days without loadshedding

Eskom recently celebrated 200 days of not being forced to implement nationwide rolling blackouts, boasting that as they reported …due to having sufficient energy reserves.

Highlighting their use of open-cycle gas turbines (OCGT), Eskom stated on 11 October that they had spent R6 billion on generating 915.17 GWh between the beginning of April and the end of September.

However, Eskom stated that diesel usage remained low, having spent less than the previous year, where they spent R18 billion on generating 2 946.86GWh.

Top 20 entities receiving deviations

A total of 1,632 deviations were granted, however, Eskom’s deviations were the overwhelming bulk of the R25.52 billion granted to the top 20 recipients in the second quarter.

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Sanral was second with R581 million in deviations. Rustenburg’s water board, Magalies Water, had the third highest amount of deviations as it was granted R504 million.

Postbank was given R118 million in deviations, the State Information Technology Agency was given R63 million, with Sassa and the Road Traffic Management Corporation got roughly R40 million each.

Additionally, there were contract modifications and expansions totalling at least R7.2 billion, of which R4.49 billion was attributed to Eskom.