Liquidity constraints and procurement problems continue to impede Eskom’s reliability maintenance recovery (RMR) programme, with CEO Andre de Ruyter reporting that South Africa’s public procurement rules have undercut the utility’s efforts to swiftly appoint the competent contractors needed to undertake the programme.

In a briefing hosted during another bout of Stage 4 load-shedding – which is expected to be de-escalated to Stage 3 on Wednesday and then Stage 2 on Friday, before being cancelled entirely over the weekend – De Ruyter said the procurement system “really does not lend itself to this type of maintenance programme”.

The RMR was first unveiled in early 2020 and was punted as the solution to help Eskom stabilise its coal fleet to the point where the risk of load-shedding would be materially reduced, albeit not eliminated, by October this year.

In the event, Eskom will breach 1 000 hours of load-shedding for the first time this year, making it the worst-ever period for the implementation of rotational cuts.

Under the Public Finance Management Act (PFMA), the utility is required to apply to the National Treasury for permission to deviate from the rules, with the average response time currently exceeding 77 days.

“You can imagine that there are a large number of these requests that get made and that it has had a negative impact on our ability to appoint the necessary competent contractors and to do so swiftly . [and] to make sure that those contractors are on site, properly resourced with the right spares and the right skills at their disposal in order to execute on the maintenance programme.”

COO Jan Oberholzer, therefore, confirmed that Eskom was “absolutely not” satisfied with the competence of all the contractors currently performing maintenance at its coal power stations.

Employing incompetent contractors, he indicated, was linked directly to the procurement rules, which “we are actually addressing with Treasury”.

Likening the coal plants to a Mercedes-Benz vehicle, he said it was not always straightforward, owing to the procurement rules, to take the car to a “Mercedes-Benz garage that employed a Mercedes mechanic and used Mercedes spares”.

“In the past, you had to go out on open tender and appoint whoever was the cheapest . . . and this is giving us, in some areas of the business, significant challenges.

“But we are discussing this with our colleagues at National Treasury to have a look at how the PFMA should be applied at Eskom, specifically in the current situation that we find ourselves in.”

Likewise, the RMR had been affected by the group’s liquidity problems, which were resulting in the release of insufficient funding, which was also not always flowing in time for maintenance to be fully planned and executed.

Oberholzer has indicated previously that R11-billion is required yearly to maintain the generation business and that at least 24 months is needed to plan a major outage.

“This financial year, we were given R3-billion in April and only in September were we allowed an additional R3-billion,” Oberholzer said, explaining that the late release of the funding had made it difficult to both plan and execute this year’s maintenance schedule.

In the normal course, finances should be released at least six months prior to the start of an outage to secure the spares and services required, but De Ruyter said that there would have been a risk of default had the cash been released any earlier than it was.

Funding had also not year been secured for the RMR for the next two financial years.

De Ruyter said the liquidity crunch and procurement issues, together with the hard Covid lockdowns of 2020, had delayed the roll-out of the RMR and had also meant that it could not meet its initial target of having stabilised the coal fleet by October.

He once again reiterated that the risk of load-shedding would persist for as long as South Africa did not add the 4 000 MW to 6 000 MW required for system adequacy and to create the t...