The Supreme Court of Appeal (SCA) on Monday 23 March dismissed Eskom\u2019s appeal against an earlier high court ruling to compel the utility to disclose its contracts for purchasing and transporting coal and diesel.<\/p>\n
The court found that it is in the public interest to disclose the contracts and rejected Eskom\u2019s argument that the contracts are commercially sensitive.<\/p>\n
Read:\u00a0Eskom ordered to disclose coal, diesel and electricity export contracts [Mar 2024]<\/p>\n
Coal is the single biggest item on Eskom\u2019s shopping list, while its diesel purchases skyrocketed when its coal-fired power stations faltered and load shedding was at its worst.<\/p>\n
At the height of load shedding, Eskom spent R33 billion on diesel (in 2023\/24), exceeding its budget by far.<\/p>\n
Energy regulator Nersa provided R95 billion in Eskom\u2019s revenue allocation for buying coal in the current financial year. That goes up to R105 billion in 2027\/28. For diesel it provided for R7 billion in the current year, increasing to R7.6 billion in 2027\/28.<\/p>\n
Crucial that contracts be scrutinised<\/strong><\/p>\n Because the law provides that Eskom is allowed to recover only efficiently incurred cost from electricity users, it is crucial that its contracts with suppliers for diesel and coal be scrutinised \u2013 but Eskom has so far insisted that this is confidential information.<\/p>\n The secrecy was maintained by Nersa, as can be seen in the heavily redacted Nersa document below.<\/p>\n ADVERTISEMENT<\/p>\n CONTINUE READING BELOW<\/p>\n<\/div>\n<\/div>\n<\/blockquote>\n This was among the reasons provided for its decision on Eskom\u2019s revenue for the three years ending 31 March 2028.<\/p>\n Source: Nersa<\/p>\n<\/div>\n In June 2022, amid intense load shedding, AfriForum sent a request in terms of the Promotion of Access to Information Act (PAIA), asking for copies of Eskom\u2019s electricity supply contracts with neighbouring countries as well as its coal and diesel purchasing and transportation contracts.<\/p>\n Eskom provided the contracts with neighbouring countries but refused to give AfriForum access to coal and diesel contracts, claiming they are \u201ccommercially sensitive\u201d.<\/p>\n AfriForum challenged Eskom\u2019s refusal in the High Court in Pretoria and received a ruling in its favour in 2024.<\/p>\n Eskom refused to accept the ruling and lodged an appeal in the SCA, with leave of the high court. This appeal has now been dismissed.<\/p>\n The SCA rejected Eskom\u2019s argument that the information is commercially sensitive.<\/p>\n<\/blockquote>\n Judge Elizabeth Baartman emphasised that \u201c[the] public, in whose interest Eskom concludes these contracts, has a right to access them\u201d.<\/p>\n She further supported the high court\u2019s finding and stated: \u201cIt follows that I cannot fault the high court\u2019s finding that there is nothing to support the allegation that the agreements are confidential, contain information that is commercially sensitive, and would disadvantage Eskom or third parties in contractual negotiations\u201d.<\/p>\n ADVERTISEMENT:<\/p>\n CONTINUE READING BELOW<\/p>\n<\/div>\n<\/div>\n Questions can now be answered<\/strong><\/p>\n Morn\u00e9 Mostert, manager of local government affairs at AfriForum, says it will now be possible to finally investigate, almost four years since the organisation originally submitted its PAIA application to Eskom, whether the coal and diesel contracts are market-related and legally concluded.<\/p>\n \u201cEskom procures more than 100 megatons of coal annually, making it one of its largest expenses,\u201d he points out.<\/p>\n \u201cConsidering documented irregularities regarding Eskom\u2019s procurement processes, findings of the Zondo Commission of Inquiry into State Capture and detailed shortcomings in Eskom\u2019s own financial statements, transparency regarding these contracts is essential,\u201d Mostert emphasises.<\/p>\n Read: He says there is immense interest in the contracts from, among others, universities.<\/p>\n \u201cI get phone calls every week from parties with expert knowledge that are interested in assisting with the analysis of the contracts.\u201d<\/p>\n<\/blockquote>\n He says AfriForum will assemble a team of experts to study the contracts. Eskom does however still have the option of taking the matter to the Constitutional Court.<\/p>\n Eskom\u2019s pattern of secrecy<\/strong><\/p>\n ADVERTISEMENT:<\/p>\n CONTINUE READING BELOW<\/p>\n<\/p><\/div>\n<\/div>\n<\/div>\n Eskom refused to provide Moneyweb with a copy of its Distribution Agency Agreement with the Merafong local municipality, also because it views it as being commercially sensitive. Moneyweb succeeded in getting a copy from another source.<\/p>\n Read: Eskom and Nersa concluded a secret settlement that would cost consumers R54 billion more in electricity tariffs following a mistake Nersa made with Eskom\u2019s revenue determination.<\/p>\n AfriForum and Minerals Council SA took the matter on review to the high court where it was declared unlawful, set aside and remitted to Nersa.<\/p>\n Read: The court expressed its discomfort with the secrecy and exclusion of the public and stated: \u201cDecisions made in secret and without public knowledge is anathema to the statutory framework, and to our Constitutional norms.\u201d<\/p>\n Eskom<\/strong>\u2019s<\/strong> response to <\/strong>the<\/strong>\u00a0SCA ruling<\/strong><\/p>\n<\/div>\n Eskom issued a brief statement on Monday stating that it \u201cis studying the judgement [sic] in consultation with its attorneys, after which it will decide how it will approach the matter\u201d.<\/p>\n<\/div><\/div>\n\n
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