Eskom Deal Partly Blamed for South Africa Power Cuts: City Press

(Bloomberg) -- A decision to stop a boiler-monitoring software contract worth 275 million rand ($19 million) between Eskom Holdings SOC Ltd. and Carab Technologies (Pty) Ltd. may have contributed to the rolling blackouts that are hobbling the nation, City Press newspaper reported.

The National Treasury in 2017 refused Eskom’s request to extend a contract with Carab, which is owned by former Eskom employees Dirk Van Aarde and Fanie Scheepers, to provide software and technology to monitor the boilers. Both are facing allegations of fraud and of using the software paid for by the power company, according to City Press.

Blackouts in South Africa intensified on March 16 after Eskom, which supplies about 95 percent of country’s electricity, said it lost additional generation, including electricity imports from Mozambique. The utility’s operational and financial woes stem from years of mismanagement and alleged graft. Eskom has been been described by Goldman Sachs Group Inc. as the biggest single threat to South Africa’s economy.

The tender was halted in September 2017 because there was no evidence Carab’s service couldn’t be provided by others, and it wasn’t clear how the company was selected by Eskom for the work, according to City Press.

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