Energy

Eskom corruption and fraud worse than stated

Electricity Minister Kgosientsho Ramokgopa said that corruption and fraud at Eskom are understated despite it being so well documented. 

Ramokgopa told The Money Show that corruption and fraud are only a part of Eskom’s problems, but they are by far the most well-documented. 

The minister highlighted the progress that Eskom has made in improving its generation fleet’s performance, which has reduced load-shedding. 

“Of course, we are not out of the woods yet. We still have a lot to do to ensure the stability of the grid and to create a surplus of electricity to enable the economy to grow.”

One of the areas the National Energy Crisis Committee (NECOM) identified as critical to the turnaround of Eskom was the prosecution of corruption, fraud, and sabotage at the utility. 

Ramokgopa said this is “one of the challenges that is well-documented” and requires more attention and effort from Eskom and law enforcement agencies. 

However, despite being well-documented, Ramokgopa said, “I think it is an area that is understated.” 

Eskom has to isolate stations notorious for having low Energy Availability Factors (EAF), which is an indication of embedded corruption and sabotage. 

If a power station or a unit consistently underperforms its peers, then an external factor affects its performance. 

Issues such as perennial boiler tube leaks, incorrect filters, or improper equipment are signs of corruption and fraud involved in procurement. 

A key factor in tackling corruption and fraud at Eskom is stabilising the relationship with labour on a local level by continuously engaging with employees and labour unions. 

This will boost morale and enhance the productivity of workers at Eskom, said Ramokgopa, resulting in higher quality maintenance being done. 

Middlemen cause 3 stages of load-shedding

Ramokgopa previously said the slow procurement through middlemen of specific components reduces Eskom’s output by 2,800MW on average.

Among the measures he outlined to increase the reliability of Eskom’s fleet, Ramokgopa paid specific attention to the “procurement of strategic components”.

When a unit trips, Eskom engineers identify the components that need to be replaced and then give an estimated time of return to service.

Ramokgopa said that in most cases, the units take longer to return than is initially estimated because of the slow procurement of replacement components.

He refers to this as “outage slips”, making it incredibly difficult to manage the supply-demand balance as the return of units to service is unpredictable.

On average, these outage slips reduce Eskom’s output by 2,800MW, equivalent to three stages of load-shedding.

To resolve this, Ramokgopa has called for procurement processes to be accelerated by removing middlemen in the transactions.

The minister wants Eskom to source the components directly from suppliers and store them on-site, in central warehouses, or in the utility’s workshops.

The removal of middlemen will improve the reliability of Eskom’s fleet and increase the EAF, as it will enable units to be returned to service more quickly.

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