A few weeks ago Eskom lost a court decision on appeal to hide the details of their tenders and this is the first to be revealed. More to come over the next month or so and will reveal how bad things really are with regard to corruption. These tenders are all linked to the government family members benefitting for the Black Economic Empowerment (BEE) regulations in place at the detriment of the entire country. The so called 100-500 families leading the list of beneficiaries is very real.
Last week the details of one of the Eskom (electricity SOE) tenders was revealed with regard to diesel supply. The numbers are quite staggering so you would think it would be the top companies like Shell , BP or the likes in the running. This story reminded me of when I was asked to help with tenders back in 2006/7 with an old work colleague also supplying diesel to the police force and toiletries to the prisons. I stupidly walked away as it made no logical sense how anyone could supply if you were not directly involved in that industry.
In 2024 Eskom the SOE electricity supplier for South Africa awarded 5 diesel supply tenders to 5 companies of which 3 you would have been asking questions. One billion liters of diesel over 5 years one would have thought would have taken anyone not directly in the wholesale supply of diesel out of contention. The tender stated that the requirements for a winning bidder was that you had to be able to store at any one time 5 million liters of diesel and that payments would be 60 days so nearly R100 million. In your head you are doing the figures because they could draw that twice or three times over the 60 day period so any company or supplier could be waiting on R300 million in owed money.
The 5 companies were Astron Energy (refinery), African Forwarding and Shipping known as AFS (importers) and a member of the Fuel Importers Association so these two are what you would expect and nothing a miss here thus far.
The first dodgy company Severino Industries headed up by former Reserve Bank Governors brother who later resigned to deflect the obvious. The share would be R4.366-billion of the R21 billion tender.
Lanele Resources was the second company who at the time of being awarded the tender was under investigation for corruption with another SOE Transnet when they bought 3 apartments for Transnet executives as bribe payments. Their share of the tender was going to be R4.359-billion.
Nutinox the third dodgy party involved was a company owned by a gentleman living in the Eastern Cape with the business registered to a fake address in Johannesburg. This fake address actually scored points with the tender for location. This company had a tender supplying water via water tankers in Johannesburg and the company also had a fuel wholesalers license. Their share of the tender would be R4.376-billion. This is an ANC linked deal as the father of the Director of this company was a freedom fighter for the ANC during Apartheid days and oddly enough resigned when the contract was awarded.
Back in 2024 Eskom had tried to secure a wholesale diesel license .but was refused by the Minister of Energy and Resources. Petro SA another SOE company was never selected as a supplier due to not scoring enough points on their BEE status. The company was not black enough even though it was owned by the State. The same applied to Shell and BP even though their prices were far better.
At the beginning of 2025 in January power stations were failing with many having load losses and they needed diesel to run the huge turbines. Most of the tender contracts needed signing and this is when they started going rogue. if they had not already.
The turbines were chewing through 50 million liters per month and instead of doing the original deal of 60 days offered 15 day payments for discounts. Now the deal became even worse with pre payments because Eskom realised that their suppliers did not have the funds to pay up front. Nutinox was paid for a shipment of diesel on the 27th February and only received or started to receive supply on the 11th March. Severino Industries also received a pre payment for R378.6-million.
Not surprisingly the 3 dodgy companies were the ones being used to supply fuel with the down payments for March reflecting the following. R3 billion in cash up front payments due to suppliers not having the financial resources in place even though this is was what the tender was based upon.
Nutinox, worth R295-million,
Lanele, worth R1.297-billion,
And Severino, worth R1.374-billion.
The other 2 tender suppliers had not received such similar offers and there was no prepayment deals on the table. The orders these two companies were offered were minimal with the lions share going to the 3 questionable companies.
It actually gets worse when it comes to the storage of the 5 million liters of fuel. Lanele had a storage deal with Astron and guess it was free if they bought the fuel from Astron so they had no storage deal in place. Nutinox had a storage deal in place with Petro SA who would be storing fuel anyway and charged Eskom an extra fee of R340K monthly over and above the R860K rate so R1.2 million storage fees monthly and would suggest this was all pocketed. Petro SA was benefitting through supplying via a third party so there was no need to charge for storage much like the deal with Astron. Because this was a 5 year tender even with no supply this deal still stands to 2030 so they are literally earning R1.2 million monthly for doing zero work.
Eskom's defense for the diesel tender is that they had no other choices especially when it came to prepayment which we all know is not true and they should have just gone with the bigger companies who handle diesel in the first place. The three companies used these larger companies for supply anyway acting as middlemen making the diesel costs that much more expensive for the consumers who ultimately pay the bill at the end of the day.
What we are all waiting on is the much bigger juicier coal tenders that Eskom has been fighting in court to block being made public and this will all be revealed shortly. I feel sorry for the likes of AFS who should have got their fair share of this deal and were totally shafted in the process. When there is big money on offer it is scary what unravels behind the scenes and to think the coal supply will be far worse than this is madness.