Eskom to buy in coal urgently

Treasury approves deviation from tender process to deal with immediate shortage

Image: Dean Hutton/Bloomberg

The national treasury gave Eskom permission yesterday to deviate from standard procurement processes to deal with pressing coal-supply problems.

The Treasury said: “In April 2018‚ Eskom approached the chief procurement office to ask for permission to source coal from other coal suppliers. Eskom was then granted approval to deviate from competitive bidding.”

It emerged this week that the power utility’s coal stockpiles are dangerously low, compounded by problems at the Gupta-owned Tegeta mine which supplies coal to a number of Eskom plants in Mpumalanga.

Eskom executives told members of parliament the total system coal stockpile for all power stations was now at 34 days‚ and if Medupi and Kusile were included‚ this rose to 67 days.

They said they needed urgent authorisation from the Treasury to purchase more coal without having to go to tender‚ as seven power stations had coal stockpiles that were lower than the levels required.

In the interim, coal was being moved from power stations with healthy stockpiles to those that did not have sufficient stock, Eskom executives told parliament’s portfolio committee on public enterprises.

The committee welcomed the financial reports Eskom tabled on Wednesday‚ but said it had seen similar promising reports before that were not followed by great outcomes.

Eskom executives had briefed the committee on its annual performance plan and financial report.
“The committee welcomed what it heard about interventions made by the new board,” it said in a statement.

“However‚ it cautioned that the power utility has presented beautiful annual reports in the past‚ and yet now finds itself on the verge of collapse. The committee‚ on the other hand‚ is looking for sustainability at Eskom.’’

The committee expressed concern that municipalities owed R13.5-billion to the power utility, saying Eskom had appealed for intervention as this problem was beyond its control.

It welcomed the ongoing Eskom investigation into 239 cases of employee misconduct and the fact that punitive steps were being taken against employees involved in graft.

The committee also hailed Eskom’s decision to implement lifestyle audits on employees.

It said Eskom should devise ways to support the state mining company to source coal.

“Discussions need to take place between the board and management in order to capacitate the state-owned mining company‚ which is under the Department of Energy.” – TimesLIVE