Eskom must do away with racial procurement – IRR

10 May 2023

Load-shedding will continue to worsen for as long as the government refuses to implement the Zondo Report’s recommendation to put value for money before race-based procurement, the Institute of Race Relations has warned.

The IRR has written to Minister of Electricity Kgosientsho Ramokgopa to underscore the urgency of implementing the Zondo Commission’s recommendation.

It is clear from Minister Ramokgopa’s warning on television this week that stage 7 or even stage 8 load-shedding was now possible, and that the next 150 days were going to be “very tough”, that South Africans should brace themselves for worsening load-shedding this winter.

One immediate step that the government can take is to exempt Eskom from racial procurement, to ensure that it derives maximum value for money. This will in turn reduce corruption at the power utility, which has been a significant factor in load-shedding.

The Commission of Inquiry into State Capture Report describes a scale of corruption at Eskom that will require hard work to overcome. But it spells out where a positive start can be made in noting that “the primary national interest is best served when the government derives the maximum value-for-money in the procurement process and procurement officials should be so advised”.

The Zondo Report demonstrates why an exemption is in the public interest by drawing attention to the crony-capitalist alternative that persists so long as conflicting laws fail “to identify the primary intention” of getting maximum value from the non-racial public purse. Hundreds of billions or rands, probably trillions, have been looted.

The negative repercussions identified by the Zondo Commission are clear reasons to opt for an approach where either race comes first, or maximum value for money comes first.

The Preferential Procurement Policy Framework Act (PPPFA) empowers finance minister Enoch Godognwana to “exempt any organ of state from any or all the provisions” of the framing Act’s racial preferencing if “it is in the public interest”.

After touring Tutuka Power Station on 22 March this year, Minister Ramokgopa said in an interview: “There are issues that require attention in the procurement environment, and this can be closely associated with the existence of corruption.”

Said IRR Campaign Manager Mlondi Mdluli: “This week the IRR sent a letter to Minister Ramokgopa reminding him of the Zondo Report’s recommendation to put value for money over racial procurement. Most importantly we enquired if he would pass on this reminder to all officials relevant to his ministerial position. Judging from what I have seen so far, the minister comes across as someone who is willing to engage. I hope that he will consider the contents of our letter.”

Issued by Mlondi Mdluli, IRR Campaign Manager, 10 May 2023