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- Eskom says the Fidelity Services security contract was in line with its procurement procedure.
- It says it also followed the National Treasury directives for emergency procurements and ended up paying R250 million.
- The power utility is accused of signing the R500 million three-month security contract without any bidding process.
- For more financial news, go to the News24 Business front page.
Eskom has defended the R500 million security contract signed with the Fidelity Services Group a few months before former Eskom CEO André De Ruyter resigned. The power utility issued a statement on Sunday, saying everything was above board in the procurement of the contract that cost the power utility just shy of R1.7 million a month.
In May, the City Press published a story based on its investigation, which found that Eskom allegedly paid Fidelity Services Group R500 million in three months without competitive bidding. City Press said that Fidelity was handpicked to provide Eskom with more than 400 guards to supply 24-hour security services to all Eskom's facilities because of an intelligence report that flagged imminent sabotage of its property.
Weeks after that report, Eskom has now responded, saying it
is aware of the claims of corruption and fraud linked to that contract. It said
the contract in question covered the period of three months from July 2022 to
September 2022 and mainly focused on the critical power stations, strategic
corporate sites, and the transmission network.
"Eskom would like to reassure South Africans that the placement of the Fidelity Services security contract was in line with Eskom's procurement procedure and the National Treasury directives for emergency procurement of services," said the company in a statement on Sunday.
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It said its management had received legitimate information about a potentially serious security risk to its operations and assets. Although Eskom didn't indicate in the statement that it requested quotes from other suppliers, it said it was satisfied with Fidelity's quotation. It also said that it ended up paying half of the contract price.
"Operationally, across Eskom sites, there was daily and monthly monitoring of activities, and the payment of the invoices over the 3 months was in line with the contracted services. A total of approximately R250 million, including VAT, was spent for the duration of the contract," read the statement.
The utility added that given the seriousness of the corruption allegations, it will work with the relevant authorities on any investigation.
