Eskom’s Over R41.4 Billion in Contract Expansions

Statement by Kevin Mileham MP – DA Spokesperson on Electricity and Energy:

South Africans face another 8.83% electricity tariff increase next year, while Eskom has reportedly added R41.4 billion to existing contracts without putting the additional work through a new competitive procurement process.

An investigation by the Sunday Times found that Eskom accounted for nearly 60% of the R69.6 billion in contract expansions across national departments and state entities between October 2023 and March 2026. Eskom alone accounted for 847 expansions, with the recorded justification reportedly being little more than the word “expansion”.

One engineering and project-management contract at Medupi and Kusile, originally awarded for R114 million in 2006, has reportedly grown to approximately R2.5 billion. Another R437 million was added in June 2025 alone.

For five consecutive years, Eskom has received qualified audit opinions. Its auditors have repeatedly identified weaknesses in procurement and contract management, including being unable to verify whether certain contracts were awarded at reasonable prices. Yet Eskom has now been identified as responsible for R41.4 billion in contract expansions over just two and a half years.

Eskom needs to explain why so much additional work was allocated through existing contracts rather than competitive tenders. If contracts were repeatedly expanded because replacement tenders were not completed on time, that points to a serious failure of procurement planning. Consumers should not be expected to carry the cost of such failures.

The DA will request that Parliament’s Portfolio Committee on Electricity and Energy call Eskom’s leadership to account. We want a full breakdown of these expansions, the reasons they were approved, who authorised them and what evidence exists that the prices paid represented value for money. We also want to know whether any of the expenditure has been classified as irregular and what consequences have followed.

Contract expansions may be legally permissible, but that does not automatically make them necessary or cost-effective. Eskom has an obligation under the Public Finance Management Act to maintain proper procurement controls and safeguard public resources.

Before Eskom asks consumers to pay another 8.83% more for electricity, it should explain why R41.4 billion was added to existing contracts and produce the evidence that those expansions represented value for money.