Eskom Strengthens Procurement Assurance and Contract Management Controls

Following the completion of the legal assessment, diesel reconciliation and verification processes arising from the investigation into diesel procurement and storage contracts under Tender MWP2197GX, Eskom pledged in its public statement of Thursday 27 August 2026 – Independent investigation confirms all diesel accounted for; identifies governance shortcomings – to address the identified governance shortcomings.

During the legal assessment, the report from the independent forensic firm was reviewed to ensure that all findings strictly met the necessary evidentiary and procedural standards to support any future disciplinary and/or legal action.  It is upon this verification that Eskom has based all its actions in response to the investigations’ findings to date and will continue to do so. As required where the evidence exists, Eskom is addressing all the substantiated findings through consequence management and strengthening its controls to reduce the risk of recurrence.

An audit conducted by an independent audit firm found no evidence that diesel paid for by Eskom is missing. The legal assessment found that allegations that the procurement award process under Tender MWP2197GX was compromised, could not be substantiated.

As explained in Eskom’s earlier detailed media release, during January to March 2025, a combination of extensive generation unit breakdowns, delayed unit returns from maintenance and constrained pumped-storage reserves which placed a constrained power system under severe and unexpected pressure and required rapid operational responses and difficult decisions by employees and executives.

Contract management process

The investigation did, however, confirm instances of non-adherence to Eskom processes concerning payments made to certain suppliers. These payments formed part of the contract management phase, with the procurement phase concluded. The substantiated legal assessment findings relate principally to payments outside contractual terms, and emergency approvals that did not comply with Eskom’s Delegation of Authority.

Payments outside of contractual terms had also been made under the previous fuel-supply contract with major fuel oil suppliers that were in effect since 2019 and expired in December 2024. These payments, similarly, were made under urgent and exceptional adverse operational circumstances that resulted in an irregular expenditure. The amount of approximately R38 billion in irregular expenditure was determined by the Eskom Loss Control Function in June 2026.

As Eskom has previously stated operational pressures do not diminish its obligation to comply fully with internal controls and governance requirements.

Strengthening of governance frameworks

To address governance shortcomings, Eskom is conducting an on-going, iterative process to assess all the current processes across the business that contributed to this situation, in order to develop strengthened governance and internal control frameworks for contract management and operational emergencies.

The processes reviewed include the Delegations of Authority (DoA’s), the Terms of Reference (ToR’s) for the Emergency Response Crisis Committee, emergency powers and the relevant procurement procedures.

These actions are in addition to those that Eskom had already implemented ahead of the completion of the legal assessment, diesel reconciliation and verification processes. A key action taken was the reintroduction of full scope proactive assurance and probity reviews. In October 2022, the central panel used to perform proactive assurance and full probity reviews on procurement transactions exceeding R500 million was discontinued on the grounds of cost effectiveness and not having identified significant findings in high value tenders reviewed over a period of time. Since then, only limited scope reviews have been undertaken by appointed audit firms, leaving the business vulnerable to potential procurement irregularities. Limited scope reviews typically only included anti bribery, fraud and anti-money laundering checks.

From late 2025 proactive assurance and full scope probity reviews were reinstated retrospectively on some transactions from last year and since May 2026, on all high-value tenders, making it procedurally difficult to recommend bidders who fail mandatory requirements.

In line with the recommendations of the Zondo Commission that recommended that the board of a company should ideally not be involved in its procurement processes, the Eskom Delegation of Authority was amended to ensure the Board does not participate in procurement decisions but provides only strategic guidance such as the approval of procurement strategies.

Eskom supports and encourages the reporting of any concerns or alleged wrongdoing through its established whistleblowing and reporting mechanisms and treats all such information with the necessary seriousness and confidentiality. Eskom calls on the public to report any illegal activity affecting its operations to the Eskom Crime Line at 0800 112 722 or via WhatsApp at 081 333 3323.

Further information

Eskom has reported the progress of the investigation extensively and previous news releases can be found at the following links:

Independent investigation confirms all diesel accounted for; identifies governance shortcomings – August 27, 2026

Independent investigation confirms all diesel accounted for; identifies governance shortcomings

Eskom provides details on the progress of the independent investigation into diesel procurement and storage contracts – July 31, 2026

Eskom provides details on the progress of the independent investigation into diesel procurement and storage contracts

Eskom receives its report on independent investigation into diesel procurement and storage contracts and announces further action taken – June 29, 2026

Eskom receives its report on independent investigation into diesel procurement and storage contracts and announces further action taken

Eskom outlines first key actions arising from interim investigation report into diesel procurement and storage contract; possibility of criminal charges not ruled out – May 15, 2026

Eskom outlines first key actions arising from interim investigation report into diesel procurement and storage contract; possibility of criminal charges not ruled out

Eskom provides an update on investigation into diesel procurement and storage contracts – April 22, 2026

Eskom provides an update on investigation into diesel procurement and storage contracts

Courtesy of Eskom

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