Eskom cancels 'questionable' contract

Eskom has cut ties with Econ Oil & Energy after finding irregularities in a contract it entered into with the company last year.
Eskom has cut ties with Econ Oil & Energy after finding irregularities in a contract it entered into with the company last year.
Image: BLOOMBERG/WALDO SWIEGERS

Eskom on Friday announced that it had cancelled a contract it had entered into with Econ Oil & Energy — the country's first black female-owned oil plant — after it found that there were some questionable issues surrounding the contract.

In a statement, the power utility said: “A review of the circumstances leading to the tender being awarded to the company revealed serious irregularities in the process, including inflated prices charged to Eskom when lower-priced alternatives were evident.”

The five-year contract was signed in 2019 but Eskom said it had since instigated legal proceedings to terminate the contract.

Meanwhile, it was also conducting an internal probe into how the contract was approved.

“Where applicable, disciplinary processes will be pursued and criminal charges will be laid,” the parastatal said.

On its website, Econ Oil & Energy describes itself as a privately owned black female business and a Level 2 B-BBEE company.

The oil plant, based in Marble Hall, reportedly started doing business with Eskom as far back as 2013.

In 2014, the Daily Dispatch reported that the company had a five-year contract with Eskom which would see it supply the parastatal with 16 million litres of fuel each month. This was to provide for the demand of oil at the Hendrina power station.

This dubious contract was uncovered after Eskom embarked on a project earlier this year to review all its major contracts.

Eskom said other companies could follow in Econ Oil & Energy’s footsteps.

“Where evidence of corruption or other irregularity has been discovered, Eskom will not hesitate to take steps to cancel such contracts, and to recoup any losses that it might have incurred as a result of any irregular actions,” it said.

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