To address governance shortcomings identified during the investigation of diesel procurement and storage contracts, State-owned power utility Eskom is conducting an ongoing, iterative process to assess all the current processes across the business that contributed to this situation to strengthen governance and internal control frameworks for contract management and operational emergencies.

It is reviewing the processes for delegations of authority (DoAs), the terms of reference 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, the utility says.

A key action that was implemented was the reintroduction of full scope proactive assurance and probity reviews, it notes.

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, Eskom says.

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

In line with the recommendations of the Zondo Commission that recommended that Eskom’s board should ideally not be involved in its procurement processes, the Eskom DoA 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 notes.

Meanwhile, the investigation had confirmed instances of non-adherence to Eskom processes concerning payments made to certain suppliers under emergency approvals that did not comply with Eskom’s DoA.

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 irregular expenditure.

The amount of approximately R38-billion in irregular expenditure was determined by the Eskom Loss Control Function in June.

However, as Eskom has previously stated: operational pressures do not diminish its obligation to comply fully with internal controls and governance requirements, it adds.