Eskom failed to follow its own supply chain policies, the PFMA and Section 217 of the Constitution when making pre-payments to the Gupta’s Tegeta exploration and resources to secure coal supply, said Corruption Watch in a statement.
“We are concerned about the nature and scale of procurement irregularities at Eskom,” said Corruption Watch’s executive director, David Lewis.
“The failure to plan for the provision of goods or services is not a justification for obtaining emergency procurement, especially when it appears to have been approved without conducting proper due diligence,” added Lewis.
Eskom Chairperson Ben Ngubane said there was nothing sinister about the power utility’s contract with coal mine part-owned by the Guptas.
Responding in Parliament to questions into the supply of coal by Tegeta, Ngubane said making pre-payments is common Eskom practice.
“Mining is expensive. [Tegeta needed] to open up a new seam [of coal] to supply the extra coal Eskom required. Tegeta required capital to do so. In return [Eskom] negotiated a discounted price on the coal supplied to us.”
Ngubane did not specifically mention employing emergency procurement processes, but did state that “there were stations that were going to shut down. And we would have had massive load shedding. It was all well thought out…
Corruption Watch is committed to strengthening and refining planning and procurement systems, as well as the ability of private and public bodies to better detect and address corruption in their spheres of operation.
The organisation also notes the pivotal role the National Treasury plays in addressing corrupt procurement practices and holding those responsible accountable.
“The extent of these irregularities can potentially impact our national economy significantly, as well as distort the proper use of taxpayers’ money and efficiency in the delivery of services,” added Lewis.