Energy analyst Ted Blom says it is concerning that Eskom has failed to pay its contractual obligations to a global software company, Oracle.
The power utility is involved in a contractual dispute with the South African arm of Oracle. Oracle claims Eskom has underpaid by R7.3 billion for services it rendered, while the power utility says the amount due to Oracle is approximately R166 million, which it has offered to settle.
The power utility last week announced it has put contingency plans to reduce the risk of reliance on Oracle Corporation following the contractual dispute.
Blom is concerned about the impact of the dispute.
“Oracle has been a long-time supplier of software and control systems at Eskom. It seems to me the contract was expanded in 2017 and it strikes me as madness that between 2017 and now Eskom has never been able to quantify and pay for its usage of the Oracle software and it also baffles me that the quantum is so big and it again shows that Eskom is not on top of the situation.”
Eskom says it has contingency measures in place to reduce reliance on Oracle: Sikonathi Mantshantsha
Oracle threatened to terminate its services to Eskom. However, Eskom approached the High Court to compel Oracle to continue providing the services for the duration of the agreement until April 2022.
Mantshantsha says, “Last week the court dismissed the application. It is the intention of Eskom to launch an application for leave to appeal. As far as the technical support services are concerned, Eskom has assessed the risks in the event of Oracle withdrawing technical services support. Eskom has interim risk-mitigating processes in place to reduce the risk of its operations being disrupted.”