Eskom locked in overpayment dispute with Oracle

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Eskom can't be allowed to fail, say experts. Photo: Getty Images
Eskom can't be allowed to fail, say experts. Photo: Getty Images
  • Eskom has disputed a R7.3 billion claim by Oracle, and the parties are seeking a legal solution to the matter.
  • The power utility uses Oracle’s products for load monitoring of electricity generation by power stations.
  •  Eskom says only R166 million is due to Oracle.

Eskom says it is embroiled in a contractual dispute over the payment of the local division of the US technology firm, Oracle Corporation.

In a statement on Monday, Eskom, which is not a stranger to cases of payment disputes with contractors, said Oracle had been providing technical services until it raised a payment claim amounting to around R7.3 billion. Eskom is disputing the claim which it says was later reduced to R400 million.

"As far as Eskom is concerned, the amount due to Oracle is approximately R166 million in total," Eskom said.

The dispute has seen the parties head down the legal route in a bid to prevent Oracle from halting its technical support services before the expiry of the contract in April 2022. However, a court last week rejected Eskom's application, and the power utility says it plans to appeal the decision.

"Eskom will pursue all legal avenues and will not be bullied into paying any monies outside of the legal processes," it said.

READ: Eskom welcomes apology and R902m from McKinsey

Eskom uses Oracle’s products for load monitoring of electricity generation by power stations, according to a report by Sunday World, citing High Court application papers. It says other operations that rely on Oracle's products and services are Eskom's  online vending system that record 77-million transactions of electricity sales a month.

The state-owned power utility said it has put in place "contingency measures" to reduce the risk of its reliance on Oracle and has assessed the implications in case Oracle withdraws its support.

"Eskom finds regrettable the manner in which Oracle has handled the matter, and would like to assure the people of South Africa that as an entity dealing with public funds."

In 2018, global consultancy McKinsey & Company, returned R902 million to Eskom which was part of the payment it received for the work it undertook alongside McKinsey Trillian. The contract was found by local investigating authorities to be irregular.

McKinsey's global managing partner Kevin Sneader later apologised to South Africa over how the contract was handled, saying it overcharged the utility and was slow to admit wrongdoing.

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