August 2023

Inkululeko SA Media NPC

Co Reg: 2014/199607/08

11 August 2023

Good day to the National Treasury spokesperson,

I am a journalist for Scorpio’s investigative team at Daily Maverick. For the last six weeks I
have been investigating the policies and procedures that govern Eskom’s procurement
processes, with a focus on the SAP system and the Central Supplier Database (CSD) of
National Treasury.

The investigation is based on:

* Historical Eskom documents, most notably documents 32-1033 and 32-1034 (in which
National Treasury is extensively mentioned);
* Various revisions to the above documents as initiated by the B2B programme, launched
in 2010;
* A leaked sound-clip of a conversation between a supplier and an Eskom employee, the
result of a confirmed “phone tap” by contracted Eskom security (dated February 2022);
* Leaked screen-grabs of the SAP and CSD system, from an anonymous whistle-blower
who resigned from his/her senior position in Eskom procurement in 2021;
* Leaked slides from presentations to senior Eskom executives by internal working groups,
from the same anonymous source as above;
* Leaked spreadsheets directly exported from the SAP system, from the same anonymous
source as above;
* Leaked internal Eskom emails dated 2019, from the same anonymous source as above.

Inkululeko SA Media NPC - Reg: 2014/199607/08 - Directors: S. Charalambous, B. Brkic, I. Abedian

August 2023

Wherever possible, copies of the above source material will be provided to you so as to
facilitate answers to our questions.

Our questions to you are:

1. The link below contains a sound-file of a telephone conversation between an alleged

Eskom employee by the name of “Gerald” and an alleged Eskom supplier by the name of
“Andre,” dated 17 February 2022. The source of the leak of the sound-file is a former
senior executive of Eskom (not the primary whistle-blower as referred to below). The
source confirms that the sound-file is the result of a “phone-tap” conducted by internal
Eskom security:
../Library/Mobile Documents/com~apple~CloudDocs/AUDIO-2022-02-17-13-36-55.m4a
A textual summary of the conversation between Andre and Gerald is also included as
follows:

“How does the order work, what do you need me to do?”

Around two minutes into the seven-minute telephone call, the supplier asked the pivotal
question. Up until then, in a conversation that never pretended to be anything other than
what it was, the two men had been feeling each other out. They already knew each other’s
names so it clearly wasn’t the first time they’d spoken — the supplier was “Andre” and the
inside Eskom man was “Gerald” — but now was the moment to get into the details of the
scam.

“They’re gonna send you an RFQ,” said Gerald, referring to a fundamental item in Eskom’s
procurement system, the request for a quotation. “The RFQ will give you the scope of work.”

Apparently, thanks to Gerald, Eskom already had a vendor number for Andre’s company,
which was linked into the CSD, the central supplier database overseen by National Treasury.
What Andre needed to do next, explained Gerald, was send Eskom a quote, which would
generate an order.

“And then after that you buy the stuff you need to supply, and then you supply Eskom. After
you supply, you invoice Eskom. They will pay you fourteen days after invoicing.”

“Okay,” said Andre, “but what’s in it for me? How am I going to score out of this?”

Inkululeko SA Media NPC - Reg: 2014/199607/08 - Directors: S. Charalambous, B. Brkic, I. Abedian

August 2023

“Sorry?” responded Gerald.

“I mean, how much is for me? How much money can I make with this?”

“Per order, you will make R300,000.”

“And what’s it gonna cost me?”

“To buy the stuff… R150,000.”

“So I make at least R150,000 per order, profit?”

“No, no, no, profit is R300,000.”

“That’s money,” said Andre, impressed. “That’s money.”

Gerald, for his part, was now also warming up to the theme. “Ja,” he said. “Per order. The
total order value, né, will be R800,000.”

And so, at last, Andre was getting the full picture. Although he would only lay out R150,000,
which was the price of the actual consignment, he would put in an order for more than five
times that amount, which Gerald would push through the system. From the total R800,000,
Andre would keep R450,000. The remainder, a further R350,000, would be split between
Gerald and his line management.

“Yes,” explained Gerald, “because you must also take care of the other players. You must
take care of the procurement manager and stuff like that, you agree?”

As it turned out, Andre agreed wholeheartedly. He asked Gerald when they could begin. The
answer, according to Gerald, was by the end of the week.

a) Does National Treasury confirm or deny knowledge of the above sound-file?

b) If National Treasury confirms knowledge of the above sound-file, does it confirm or
deny that it is the result of a “phone-tap” conducted by contracted Eskom security?
c) Is National Treasury aware of any disciplinary procedures or criminal complaints that
have been brought against the parties to the conversation in the sound-file?

Inkululeko SA Media NPC - Reg: 2014/199607/08 - Directors: S. Charalambous, B. Brkic, I. Abedian

August 2023

d) Does National Treasury have any general comments on the contents of the sound-file
as it applies to the role of the CSD in facilitating alleged corruption of this nature?

2. Our primary source’s allegation is that Eskom’s procurement policies and procedures
(based on documents 32-1033 and 32-1034) have become irrelevant to most staffers —
far from stamping out corruption, he/she alleges, the layers of cross-departmental
oversight and the complexity of the system, specifically as regards the overlaps with
National Treasury’s CSD, have been abetting enterprise-wide malfeasance.

a. Does National Treasury confirm or deny this allegation?

b. If National Treasury denies the allegation, on what basis does it do so?

The problem, according to the whistle-blower, is well-known to Eskom’s principal

stakeholder, the Department of Public Enterprises. Daily Maverick understands that in
2019 there were recommendations made by a ministerial task team to improve the
procurement processes, with internal Eskom working groups assigned to take on the
task.

c. Does National Treasury confirm or deny that the various procurement problems are
well-known to the Department of Public Enterprises?
d. Does National Treasury confirm or deny that a ministerial task team was set up in
2019 to improve the procurement processes?

A slide from a presentation by one of these working groups to senior Eskom managers at
the time (see below, top of page 5) was provided by the whistle-blower, along with
his/her allegation that “nobody seems to want to take ownership of the good
recommendations made thus far.”

Inkululeko SA Media NPC - Reg: 2014/199607/08 - Directors: S. Charalambous, B. Brkic, I. Abedian

August 2023

e. Does National Treasury confirm or deny the authenticity of the above slide?
f. If National Treasury denies the authenticity of the slide, on what basis does it do so?
g. If National Treasury confirms the authenticity of the slide, does it confirm or deny that
procurement processes in the informal tendering/low-value tendering/LPO space
were (in 2019) “woefully inadequate”?
h. Does National Treasury confirm or deny, as per the allegation of the whistle-blower,
that “nobody seems to want to take ownership of the good recommendations made
thus far”?
i. If National Treasury denies the above, can details be provided be provided as to who
has taken ownership/what processes have been put in place to act on the
recommendations?

3. The below screen-grab is allegedly from the Central Supplier Database (CSD) of National
Treasury (see top of page 6):

Inkululeko SA Media NPC - Reg: 2014/199607/08 - Directors: S. Charalambous, B. Brkic, I. Abedian

August 2023

In his email explaining the context to the above, the primary whistle-blower noted the
following:

“There were procurement instructions written which forced (Eskom) generation

procurement staff (i.e. buyers) to, once a purchase requisition (a need) was created
for goods/services, search for the goods/services on the government enabled CSD
— using the informal tendering process (less than R1 million).

“Once a list of potential suppliers/vendors was populated at the bottom of the

screen, the buyers were forced (from instructions, procurement policy) to request for
a quote (RFQ) from the first 3 or 10 suppliers (the procedure and instruction note/s
were still contradicting on the number in 2021/22). In below case, the buyer was
forced to get a quote from ‘Afrika Crime Solutions’ and ‘Metsing Cartridge’ for grass
cutting services!?!

The whistle-blower continued that “based on the lowest price and the BBBEE levels, the
purchase order [PO] was awarded.” These criteria, he/she explained, and “the fact that

Inkululeko SA Media NPC - Reg: 2014/199607/08 - Directors: S. Charalambous, B. Brkic, I. Abedian

August 2023

buyers were, up until 2021 at least (still are?), required to use the CSD database, is one of
several reasons why Eskom is still paying large amounts of money for… knee guards, toilet
paper, milk, mops etc. (as it falls under R1 million, and hence requires the informal
tendering process to be followed).”

a. Does National Treasury confirm or deny the authenticity of the above screen-grab?
b. If National Treasury denies the authenticity of the screen-grab, on what basis does it
do so?
c. Has either Afrika Crime Solutions or Metsing Cartridges been awarded a contract to
cut the grass at one of Eskom’s facilities?
d. During the period to which the screen-grab refers (early 2020) was the RFQ in the
CSD applicable to the first 3 suppliers or the first 10 suppliers?
e. Are Eskom buyers currently required to use the CSD?
f. If the answer to the above is “yes,” is the RFQ in the CSD currently applicable to the
first 3 suppliers or the first 10 suppliers?
g. If the answer to the above (question “e”) is “yes,” does National Treasury confirm or
deny the whistle-blower’s allegation that this is one of several reasons why Eskom
“is still paying large amounts of money for… knee guards, toilet paper, milk, mops
etc. (as it falls under R1 million, and hence requires the informal tendering process
to be followed)”?
h. Has National Treasury put any corrective measures in place to deal with the informal
tendering process as it applies to the CSD?

4. What this all meant for the citizens of South Africa, according to the whistle-blower, was
not just random and exorbitant spending on items that had little or nothing to do with
Eskom’s core function, but also massive and entrenched inefficiencies when it came to
the functions that the power utility had been mandated to perform — for example, the
scheduled and urgent fixes on its aging fleet of coal-fired power stations.

Here, in a series of internal emails that the whistle-blower shared with us, the CSD of
National Treasury returned again to the fore.

“At Eskom,” noted our whistle-blower by way of introduction to these emails, “there is a
total disconnect between the processes and the various enabling tools (SAP, CSD, etc).”

Inkululeko SA Media NPC - Reg: 2014/199607/08 - Directors: S. Charalambous, B. Brkic, I. Abedian

August 2023

From the contents of the correspondence, his/her point was perhaps an understatement.

On 16 October 2019, an email was sent from an Eskom manager to two staffers and cc’d
to another ten staffers (due to the fact that it may compromise the safety of the
individuals concerned, the identities of the different managers/senders of the emails have
been excised).

“We have a number of challenges with the CSD system,” the first email began, “and the
[instruction] related to issuing RFQs to feeder areas local to the [power stations]. These
issues are hampering our task, [are] leading to unhappiness in the communities local to
the power stations and are [creating] risks of not having spares available when required.”

In a string of bullet points, the manager then laid out the various problems, beginning
with the observation that suppliers were uploading addresses onto the CSD “for all areas
local to every power station” — which, of course, had resulted in Eskom approaching
suppliers that were “not physically living or operating in the area.”

As large of a system leak as this point evinced, however, it was the second bullet point
that echoed and affirmed one of our whistle-blower’s primary allegations: “The CSD
commodity list is not aligned with Eskom commodity lists. This results in the buyer not
always approaching the right suppliers or… missing suppliers that are in fact qualified to
supply.” (See email at the top of page 9):

Inkululeko SA Media NPC - Reg: 2014/199607/08 - Directors: S. Charalambous, B. Brkic, I. Abedian

August 2023

a. Does National Treasury confirm or deny the authenticity of the above email?
b. If National Treasury denies the authenticity of the above email, on what basis does it
do so?
c. If National Treasury confirms the authenticity of the above email, are there any
allegations contained therein with which the organisation disagrees? If so, please
expand.
d. If National Treasury confirms the authenticity of the above email and does not
disagree with any of the allegations contained therein, have any corrective steps
been taken to deal with said allegations? If so, please expand.

Inkululeko SA Media NPC - Reg: 2014/199607/08 - Directors: S. Charalambous, B. Brkic, I. Abedian

August 2023

A week later, on 23 October 2019, a similar internal email was sent to an entirely different
set of Eskom staffers, from an entirely different manager — this time, the concerns were
specific to what was known as “Gx,” shorthand for the generation division.

“The issues with the CSD database are not going away,” stated the manager. “It is
becoming more of an issue.”

There were two primary concerns, according to this particular manager, the first to do with
“engineering” — where, again, vendors were being registered on the database without
proper vetting — and the second to do with “process” — where something called “practice
note 2" was identified as the glitch in the system. (See below):

e. Does National Treasury confirm or deny the authenticity of the above email?
f. If National Treasury denies the authenticity of the above email, on what basis does it
do so?
g. If National Treasury confirms the authenticity of the above email, are there any
allegations contained therein with which the organisation disagrees? If so, please
expand.
10

Inkululeko SA Media NPC - Reg: 2014/199607/08 - Directors: S. Charalambous, B. Brkic, I. Abedian

August 2023

h. If National Treasury confirms the authenticity of the above email and does not
disagree with any of the allegations contained therein, have any corrective steps
been taken to deal with said allegations? If so, please expand.

As for “practice note 2” in the above email, the whistle-blower provided us with an internal
email from three months before (9 July 2019) that had laid it all out.

Under the subject line “Procurement challenges,” the manager (a different individual to the
two above) clarified that it was a “policy upgrade” from document 32-1034, which had only
just been signed off as official Eskom procedure.

“Respectfully (and in my personal opinion),” he began, “these policy upgrades are not going
to assist us as procurement practitioners to render a more effective service to your
stations.”

Clearly, then, the recipients of this email — who numbered a dozen in all — held positions
of authority at Eskom’s fleet of power stations. And what they were now being told was that
a certain revision in document 32-1034 was about to make their jobs a lot more difficult.

“The new revision requires buyers to go to the first 10 names on National Treasury’s Central
Supplier Database,” the final paragraph explained, “if only one response is received, the
enquiry must be cancelled and re-issued…” (See email at the top of page 12):

11

Inkululeko SA Media NPC - Reg: 2014/199607/08 - Directors: S. Charalambous, B. Brkic, I. Abedian

August 2023

i. Does National Treasury confirm or deny the authenticity of the above email?
j. If National Treasury denies the authenticity of the above email, on what basis does it
do so?
k. If National Treasury confirms the authenticity of the above email, are there any
allegations contained therein with which the organisation disagrees? If so, please
expand.
l. If National Treasury confirms the authenticity of the above email and does not
disagree with any of the allegations contained therein, have any corrective steps
been taken to deal with said allegations? If so, please expand.

5. In the context of the questions above, is there anything further that National Treasury
would like to add so as to give clarity to Daily Maverick’s readers on the current status of
the SAP/CSD procurement systems? Specifically, from a broad perspective, have any
further processes and/or policies been signed-off to address the challenges as highlighted
by the whistle-blower?

12

Inkululeko SA Media NPC - Reg: 2014/199607/08 - Directors: S. Charalambous, B. Brkic, I. Abedian

August 2023

Due to the lengthy nature of this request for comment, as well as the likelihood that it may
take some time to compose the requisite answers, a response by COB Friday 18 August
would be greatly appreciated.

Regards,

Kevin Bloom
Investigative Journalist
kevinbloom@mac.com
+27 83 254 2616

13

Inkululeko SA Media NPC - Reg: 2014/199607/08 - Directors: S. Charalambous, B. Brkic, I. Abedian

August 2023

Inkululeko SA Media NPC

Co Reg: 2014/199607/08

11 August 2023

Good day to the Eskom spokesperson,

I am a journalist for Scorpio’s investigative team at Daily Maverick. For the last six weeks I
have been investigating the policies and procedures that govern Eskom’s procurement
processes, with a focus on the SAP system and the Central Supplier Database (CSD) of
National Treasury.

The investigation is based on:

* Historical Eskom documents, most notably documents 32-1033 and 32-1034;
* Various revisions to the above documents as initiated by the B2B programme, launched
in 2010;
* A leaked sound-clip of a conversation between a supplier and an Eskom employee, the
result of a confirmed “phone tap” by contracted Eskom security (dated February 2022);
* Leaked screen-grabs of the SAP and CSD system, from an anonymous whistle-blower
who resigned from his/her senior position in Eskom procurement in 2021;
* Leaked slides from presentations to senior Eskom executives by internal working groups,
from the same anonymous source as above;
* Leaked spreadsheets directly exported from the SAP system, from the same anonymous
source as above;
* Leaked internal Eskom emails dated 2019, from the same anonymous source as above.

Wherever possible, copies of the above source material will be provided to you so as to
facilitate answers to our questions.
1

Inkululeko SA Media NPC - Reg: 2014/199607/08 - Directors: S. Charalambous, B. Brkic, I. Abedian

August 2023

Our questions to you are:

1. The link below contains a sound-file of a telephone conversation between an alleged

Eskom employee by the name of “Gerald” and an alleged Eskom supplier by the name of
“Andre,” dated 17 February 2022. The source of the leak of the sound-file is a former
senior executive of Eskom (not the primary whistle-blower as referred to below). The
source confirms that the sound-file is the result of a “phone-tap” conducted by internal
Eskom security:
../Library/Mobile Documents/com~apple~CloudDocs/AUDIO-2022-02-17-13-36-55.m4a
A textual summary of the conversation between Andre and Gerald is also included as
follows:

“How does the order work, what do you need me to do?”

Around two minutes into the seven-minute telephone call, the supplier asked the pivotal
question. Up until then, in a conversation that never pretended to be anything other than
what it was, the two men had been feeling each other out. They already knew each other’s
names so it clearly wasn’t the first time they’d spoken — the supplier was “Andre” and the
inside Eskom man was “Gerald” — but now was the moment to get into the details of the
scam.

“They’re gonna send you an RFQ,” said Gerald, referring to a fundamental item in Eskom’s
procurement system, the request for a quotation. “The RFQ will give you the scope of work.”

Apparently, thanks to Gerald, Eskom already had a vendor number for Andre’s company,
which was linked into the CSD, the central supplier database overseen by National Treasury.
What Andre needed to do next, explained Gerald, was send Eskom a quote, which would
generate an order.

“And then after that you buy the stuff you need to supply, and then you supply Eskom. After
you supply, you invoice Eskom. They will pay you fourteen days after invoicing.”

“Okay,” said Andre, “but what’s in it for me? How am I going to score out of this?”

“Sorry?” responded Gerald.

Inkululeko SA Media NPC - Reg: 2014/199607/08 - Directors: S. Charalambous, B. Brkic, I. Abedian

August 2023

“I mean, how much is for me? How much money can I make with this?”

“Per order, you will make R300,000.”

“And what’s it gonna cost me?”

“To buy the stuff… R150,000.”

“So I make at least R150,000 per order, profit?”

“No, no, no, profit is R300,000.”

“That’s money,” said Andre, impressed. “That’s money.”

Gerald, for his part, was now also warming up to the theme. “Ja,” he said. “Per order. The
total order value, né, will be R800,000.”

And so, at last, Andre was getting the full picture. Although he would only lay out R150,000,
which was the price of the actual consignment, he would put in an order for more than five
times that amount, which Gerald would push through the system. From the total R800,000,
Andre would keep R450,000. The remainder, a further R350,000, would be split between
Gerald and his line management.

“Yes,” explained Gerald, “because you must also take care of the other players. You must
take care of the procurement manager and stuff like that, you agree?”

As it turned out, Andre agreed wholeheartedly. He asked Gerald when they could begin. The
answer, according to Gerald, was by the end of the week.

a) Does Eskom confirm or deny the authenticity of the above sound-file?

b) If Eskom denies the authenticity of the sound-file, on what basis does it do so?
c) If Eskom confirms that the sound-file is indeed authentic, does it confirm or deny that it
is the result of a “phone-tap” conducted by contracted Eskom security?
d) If Eskom denies that the sound-file is the result of a “phone-tap” conducted by
contracted Eskom security, is there an alternative explanation as to its source?

Inkululeko SA Media NPC - Reg: 2014/199607/08 - Directors: S. Charalambous, B. Brkic, I. Abedian

August 2023

e) If Eskom confirms that the sound-file is the result of a “phone-tap” conducted by

contracted Eskom security, have the full identities of “Andre” and “Gerald” been
established?
f) If the full identities of “Andre” and “Gerald” have not been established, can Eskom
provide an explanation as to why?
g) If the full identities of “Andre” and “Gerald” have been established, have internal
disciplinary procedures been instituted against them? Can Eskom expand on/provide
details of these procedures?
h) If the full identities of “Andre” and “Gerald” have been established, has a criminal
complaint been laid against them? Can Eskom expand on/provide details of the status
of the criminal complaint?

2. The screen-grab from the SAP system that follows (top of page 5) has been provided by
the primary anonymous whistle-blower, a former Eskom employee who — up until
2021— held a senior role in procurement.

“Please see below some SAP buyer roles via which buyers procured goods/services
through the SAP system,” the whistle-blower explained in an email, before pointing out
that Eskom staffers had been “fraudulently… hiding behind these ‘ghost’ vehicles to
procure whatever.”

Inkululeko SA Media NPC - Reg: 2014/199607/08 - Directors: S. Charalambous, B. Brkic, I. Abedian

August 2023

As to why these vehicles were characterised as “ghosts,” the source was explicit:

“The buyer group (i.e. PGr) should have an actual person's name and surname (the
standard way of creation), and should be unique (one to one relationship) to a specific
person's identity (in procurement). This was taken in 2020 and these roles have most
definitely made purchases.”

a. Does Eskom confirm or deny the authenticity of the above-screen grab?

b. If Eskom denies the authenticity of the screen-grab, on what basis does it do so?

Inkululeko SA Media NPC - Reg: 2014/199607/08 - Directors: S. Charalambous, B. Brkic, I. Abedian

August 2023

c. If Eskom confirms the authenticity of the screen-grab, can it confirm or deny that the
PGr should have an actual person’s name or surname and should be unique to a
specific person’s identity in procurement?
d. If Eskom confirms the authenticity of the screen-grab, can it confirm or deny that the
above buyer groups have made purchases?
e. Is Eskom aware of the problem of “ghost buyers” in general?
f. If Eskom is aware of the problem of “ghost buyers” in general, approximately how
many have been identified on the SAP system and what corrective steps have been
taken?

3. Our primary source’s allegation is that Eskom’s procurement policies and procedures
(based on documents 32-1033 and 32-1034) have become irrelevant to most staffers —
far from stamping out corruption, he/she alleges, the layers of cross-departmental
oversight and the complexity of the system have been abetting enterprise-wide
malfeasance.

a. Does Eskom confirm or deny this allegation?

b. If Eskom denies the allegation, on what basis does it do so?

The problem, according to the whistle-blower, is well-known to Eskom’s principal

stakeholder, the Department of Public Enterprises. Daily Maverick understands that in
2019 there were recommendations made by a ministerial task team to improve the
procurement processes, with internal Eskom working groups assigned to take on the
task.

c. Does Eskom confirm or deny that the various procurement problems are well-known
to the Department of Public Enterprises?
d. Does Eskom confirm or deny that a ministerial task team was set up in 2019 to
improve the procurement processes?

A slide from a presentation by one of these working groups to senior Eskom managers at
the time (see below, top of page 7) was provided by the whistle-blower, along with his
allegation that “nobody seems to want to take ownership of the good recommendations
made thus far.”

Inkululeko SA Media NPC - Reg: 2014/199607/08 - Directors: S. Charalambous, B. Brkic, I. Abedian

August 2023

e. Does Eskom confirm or deny the authenticity of the above slide?

f. If Eskom denies the authenticity of the slide, on what basis does it do so?
g. If Eskom confirms the authenticity of the slide, does it confirm or deny that
procurement processes in the informal tendering/low-value tendering/LPO space
were (in 2019) “woefully inadequate”?
h. Does Eskom confirm or deny, as per the allegation of the whistle-blower, that
“nobody seems to want to take ownership of the good recommendations made thus
far”?
i. If Eskom denies the above, can details be provided be provided as to who has taken
ownership/what processes have been put in place to act on the recommendations?

Inkululeko SA Media NPC - Reg: 2014/199607/08 - Directors: S. Charalambous, B. Brkic, I. Abedian

August 2023

4. The below screen-grab is allegedly from the Central Supplier Database (CSD) of National
Treasury:

In his email explaining the context to the above, the primary whistle-blower noted the
following:

“There were procurement instructions written which forced (Eskom) generation

procurement staff (i.e. buyers) to, once a purchase requisition (a need) was created
for goods/services, search for the goods/services on the government enabled CSD
— using the informal tendering process (less than R1 million).

“Once a list of potential suppliers/vendors was populated at the bottom of the

screen, the buyers were forced (from instructions, procurement policy) to request for
a quote (RFQ) from the first 3 or 10 suppliers (the procedure and instruction note/s
were still contradicting on the number in 2021/22). In below case, the buyer was
forced to get a quote from ‘Afrika Crime Solutions’ and ‘Metsing Cartridge’ for grass
cutting services!?!

Inkululeko SA Media NPC - Reg: 2014/199607/08 - Directors: S. Charalambous, B. Brkic, I. Abedian

August 2023

The whistle-blower continued that “based on the lowest price and the BBBEE levels, the
purchase order [PO] was awarded.” These criteria, he explained, and “the fact that buyers
were, up until 2021 at least (still are?), required to use the CSD database, is one of several
reasons why Eskom is still paying large amounts of money for… knee guards, toilet paper,
milk, mops etc. (as it falls under R1 million, and hence requires the informal tendering
process to be followed).”

a. Does Eskom confirm or deny the authenticity of the above screen-grab?

b. If Eskom denies the authenticity of the screen-grab, on what basis does it do so?
c. Has either Afrika Crime Solutions or Metsing Cartridges been awarded a contract to
cut the grass at one of Eskom’s facilities?
d. During the period to which the screen-grab refers (early 2020) was the RFQ in the
CSD applicable to the first 3 suppliers or the first 10 suppliers?
e. Are Eskom buyers currently required to use the CSD?
f. If the answer to the above is “yes,” is the RFQ in the CSD currently applicable to the
first 3 suppliers or the first 10 suppliers?
g. If the answer to the above (question “e”) is “yes,” does Eskom confirm or deny the
whistle-blower’s allegation that this is one of several reasons why Eskom “is still
paying large amounts of money for… knee guards, toilet paper, milk, mops etc. (as
it falls under R1 million, and hence requires the informal tendering process to be
followed)”?
h. Has Eskom put any corrective measures in place to deal with the informal tendering
process as it applies to the CSD?

5. The whistle-blower’s following batch of emails opened with a shot of the SAP system’s
so-called “initial screen,” where, according to the instructions, there is a prompt to
“create [an] RFQ”. Here, as the source pointed out, the Eskom buyer is faced with a
choice of six options for “purchasing organisation description” when, in his opinion, there
should be no choice at all — the only organisation that is doing any purchasing, he
insisted, is Eskom itself (see screen-grab top of page 10):

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a. Does Eskom confirm or deny the authenticity of the above screen-grab?

b. If Eskom denies the authenticity of the screen-grab, on what basis does it do so?
c. If Eskom confirms the authenticity of the screen-grab, can an explanation be
provided as to why there are six choices for “purchasing organisation description”?

Next came a screen-grab that displayed confusion and inconsistency in purchasing group
roles, with a total of 1,340 entries that had apparently been uploaded at random — the
names of individual buyers appeared above or below the names of Eskom power stations
and even entire Eskom divisions, such as generation and transmission, which each had
their own purchasing group code (see top of page 11):
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d. Does Eskom confirm or deny the authenticity of the above screen-grab?

e. If Eskom denies the authenticity of the screen-grab, on what basis does it do so?
f. If Eskom confirms the authenticity of the screen-grab, can an explanation be
provided as to why power stations and entire divisions, such as generation and
transmission, have been assigned a purchasing group code?

In the following three screen-grabs, the same pattern emerged. First there was a screen-
grab that demonstrated a dozen purchasing group roles with the entry “do not use”; then
there was a screen-grab with misspelled town names, an entry titled “avoid this one” and a
single purchasing group role for both the Medupi and Kusile power stations (neither of
which should have been there); and finally, a list of 15 names that had been duplicated,
meaning that each of these Eskom buyers had two unique purchasing group codes (please
see the three screen-grabs on page 12 & 13):

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g. Does Eskom confirm or deny the authenticity of the above three screen-grabs?
h. If Eskom denies the authenticity of the above three screen-grabs, on what basis does
it do so?
i. If Eskom confirms the authenticity of the above three screen-grabs, can explanations
be provided for the entries “do not use,” avoid this one,” the single purchasing group
code for Medupi and Kusile and, finally, the 15 individual buyers each with two
purchasing codes?
j. With the respect to the 15 buyers with two purchasing group codes, has corrective
action been taken against any of the individuals identified?

6. According to the whistle-blower, the duplication of names is a problem that extends

across the entirety of the SAP system — he/she also sent us a pair of screen-grabs that
demonstrated the pattern as it applies to Eskom’s suppliers. The difference here is that
some of the suppliers have been entered into the system as many as four times. And
significantly, as our whistle-blower noted with respect to the second screen, what we
were seeing was just “a small selection of the 10,000-plus Eskom vendors”.

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“Same vendors, different vendor numbers,” the whistle-blower commented. “Is this not the
outcome of a corrupted and weakened SAP system?” (See the two screen-grabs below):

a. Does Eskom confirm or deny the authenticity of the above two screen-grabs?
b. If Eskom denies the authenticity of the above two screen-grabs, on what basis does
it do so?

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c. If Eskom confirms the authenticity of the above two screen-grabs, can an explanation
be provided as to why some suppliers have been entered into the system as many
as four times?
d. If the above, as the whistle-blower alleges, is just “a small selection of the 10,000-
plus Eskom vendors,” does Eskom confirm or deny that duplication of
vendor/supplier numbers is “the outcome of a corrupted and weakened SAP
system”?
e. If Eskom denies the above, on what basis does it do so?
f. If Eskom confirms the above, has any action been taken to clean up the vendor
database?

7. Next, the whistle-blower provided us with a series of spreadsheets — directly exported

from the SAP system — that demonstrated, from the earliest years of the B2B
programme, how taxpayers’ funds had been put to questionable and practically
unaudited use.

Back in March 2011, for example, an individual staffer with the purchasing group code
“346” had spent R975,000 on either 1,500 or 1,5-million envelopes — it wasn’t clear from
the SAP data how many envelopes had actually been purchased. What was clear,
however, was that R800,000 had been spent on A4 envelopes and a further R175,000 on
A5 envelopes, the latter adorned with Eskom’s logo.

The problem of irregular zeroes — in other words, where the quantity of the item
multiplied by the value per item did not match the total spend — was repeated further
down in the same spreadsheet, when it came to a total spend of R805,000 on a
combined purchase of golf shirts and golf caps in September 2011.

Was it 5-million caps and 4,95-million shirts, as it stated in the spreadsheet, or 5,000 of
the former and 4,950 of the latter, as would have made sense from the calculations?
Also, even if it was the latter, how did this fit with Eskom’s core deliverable, which was no
more and no less than keeping the lights on? (See spreadsheet on top of page 16):

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a. Does Eskom confirm or deny the authenticity of the above spreadsheet?

b. If Eskom denies the authenticity of the above spreadsheet, on what basis does it do
so?
c. If Eskom confirms the authenticity of the above spreadsheet, can an explanation be
provided for how/why — seemingly throughout the spreadsheet — the quantity of
the item multiplied by the value per item does not appear to match the total spend?
d. If Eskom confirms the authenticity of the above spreadsheet, can an explanation be
provided for how a combined spend of R805,000 on golf shirts and golf caps aligns
with the organisation’s core deliverable?

Over the next eight years, as evidenced by a different spreadsheet, the situation would
show no signs of improvement. In August 2015, for instance, three exorbitant requisitions
for “emergency food” would be entered by a buyer with the purchasing group code “840”
— in a matter of weeks the purchase orders would all go through, despite the fact that all
three quantities were listed as “1,000” while both the values per item and total values were
listed as R124,000, R135,250 and R124,000 respectively.

Equally inexplicable was the fact that this particular spreadsheet, which contained only a
dozen line items, showed requisition dates — in random order — from 2011, 2012, 2015
and 2019. And if the dates on the SAP spreadsheet made no sense, the bunching together
of purchase categories made even less sense: aside from the “emergency food” purchases
there were purchases for “alcohol testers,” “additional sockets for gym” and a grouping of
three purchases, made over two days in April 2019 by two different purchasing codes, for a
total of R2,069-million in “grass cutting services”. (See spreadsheet on top of page 17):

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e. Does Eskom confirm or deny the authenticity of the above spreadsheet?

f. If Eskom denies the authenticity of the above spreadsheet, on what basis does it do
so?
g. If Eskom confirms the authenticity of the above spreadsheet, can an explanation be
provided for how/why all three quantities of “emergency food” were listed as
“1,000” while both the values per item and total values were listed as R124,000,
R135,250 and R124,000 respectively?
h. If Eskom confirms the authenticity of the above spreadsheet, can an explanation be
provided for how/why the dozen line items showed requisition dates — in random
order — from 2011, 2012, 2015 and 2019?
i. If Eskom confirms the authenticity of the above spreadsheet, can an explanation be
provided for how/why there was a grouping of three purchases, made over two days
in April 2019 by two different purchasing codes, for a total of R2,069-million in
“grass cutting services”?

A third spreadsheet from the SAP system showed the exact same pattern — ie., the entry
of random dates stretching in no particular order from 2011 to 2019, with no rhyme or
reason on the categories.

Here, an entry of R29,48-million for “consultant services” — which, firstly, should have been
categorised as a “formal tender” and, secondly, held no information on the name of the
consultancy nor on what the services were for — appeared directly above eight separate
entries (on the same day, in August 2019) for vegetable orders from McCain’s at a total of
R295,650. (See spreadsheet on the top of page 18 below):

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j. Does Eskom confirm or deny the authenticity of the above spreadsheet?

k. If Eskom denies the authenticity of the above spreadsheet, on what basis does it do
so?
l. If Eskom confirms the authenticity of the above spreadsheet, can an explanation be
provided for how/why there was an entry of R29,48-million for “consultant services”
— which, firstly, should have been categorised as a “formal tender” and, secondly,
held no information on the name of the consultancy nor on what the services were
for?

8. What this all meant for the citizens of South Africa, according to the whistle-blower, was
not just random and exorbitant spending on items that had little or nothing to do with
Eskom’s core function, but also massive and entrenched inefficiencies when it came to
the functions that the power utility had been mandated to perform — for example, the
scheduled and urgent fixes on its aging fleet of coal-fired power stations.

Here, in a series of internal emails that the whistle-blower shared with us, the CSD of
National Treasury returned again to the fore.

“At Eskom,” noted our whistle-blower by way of introduction to these emails, “there is a
total disconnect between the processes and the various enabling tools (SAP, CSD, etc).”

From the contents of the correspondence, his point was perhaps an understatement.

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On 16 October 2019, an email was sent from an Eskom manager to two staffers and cc’d
to another ten staffers (due to the fact that it may compromise the safety of the
individuals concerned, the identities of the different managers/senders of the emails have
been excised).

“We have a number of challenges with the CSD system,” the first email began, “and the
[instruction] related to issuing RFQs to feeder areas local to the [power stations]. These
issues are hampering our task, [are] leading to unhappiness in the communities local to
the power stations and are [creating] risks of not having spares available when required.”

In a string of bullet points, the manager then laid out the various problems, beginning
with the observation that suppliers were uploading addresses onto the CSD “for all areas
local to every power station” — which, of course, had resulted in Eskom approaching
suppliers that were “not physically living or operating in the area.”

As large of a system leak as this point evinced, however, it was the second bullet point
that echoed and affirmed one of our whistle-blower’s primary allegations: “The CSD
commodity list is not aligned with Eskom commodity lists. This results in the buyer not
always approaching the right suppliers or… missing suppliers that are in fact qualified to
supply.” (See email at the top of page 20):

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a. Does Eskom confirm or deny the authenticity of the above email?

b. If Eskom denies the authenticity of the above email, on what basis does it do so?
c. If Eskom confirms the authenticity of the above email, are there any allegations
contained therein with which the organisation disagrees? If so, please expand.
d. If Eskom confirms the authenticity of the above email and does not disagree with any
of the allegations contained therein, have any corrective steps been taken to deal
with said allegations? If so, please expand.

A week later, on 23 October 2019, a similar internal email was sent to an entirely different
set of Eskom staffers, from an entirely different manager — this time, the concerns were
specific to what was known as “Gx,” shorthand for the generation division.

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“The issues with the CSD database are not going away,” stated the manager. “It is
becoming more of an issue.”

There were two primary concerns, according to this particular manager, the first to do with
“engineering” — where, again, vendors were being registered on the database without
proper vetting — and the second to do with “process” — where something called “practice
note 2" was identified as the glitch in the system. (See below):

e. Does Eskom confirm or deny the authenticity of the above email?

f. If Eskom denies the authenticity of the above email, on what basis does it do so?
g. If Eskom confirms the authenticity of the above email, are there any allegations
contained therein with which the organisation disagrees? If so, please expand.
h. If Eskom confirms the authenticity of the above email and does not disagree with any
of the allegations contained therein, have any corrective steps been taken to deal
with said allegations? If so, please expand.

As for “practice note 2” in the above email, the whistle-blower provided us with an internal
email from three months before (9 July 2019) that had laid it all out.

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Under the subject line “Procurement challenges,” the manager (a different individual to the
two above) clarified that it was a “policy upgrade” from document 32-1034, which had only
just been signed off as official Eskom procedure.

“Respectfully (and in my personal opinion),” he began, “these policy upgrades are not going
to assist us as procurement practitioners to render a more effective service to your
stations.”

Clearly, then, the recipients of this email — who numbered a dozen in all — held positions
of authority at Eskom’s fleet of power stations. And what they were now being told was that
a certain revision in document 32-1034 was about to make their jobs a lot more difficult.

“The new revision requires buyers to go to the first 10 names on National Treasury’s Central
Supplier Database,” the final paragraph explained, “if only one response is received, the
enquiry must be cancelled and re-issued…” (See below):

i. Does Eskom confirm or deny the authenticity of the above email?

j. If Eskom denies the authenticity of the above email, on what basis does it do so?

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k. If Eskom confirms the authenticity of the above email, are there any allegations
contained therein with which the organisation disagrees? If so, please expand.
l. If Eskom confirms the authenticity of the above email and does not disagree with any
of the allegations contained therein, have any corrective steps been taken to deal
with said allegations? If so, please expand.

9. In the context of the questions above, is there anything further that Eskom would like to
add so as to give clarity to Daily Maverick’s readers on the current status of the SAP/CSD
procurement systems? Specifically, from a broad perspective, have any further processes
and/or policies been signed-off to address the challenges as highlighted by the whistle-
blower?

Due to the lengthy nature of this request for comment, as well as the likelihood that it may
take some time to compose the requisite answers, a response by COB Friday 18 August
would be greatly appreciated.

Regards,

Kevin Bloom
Investigative Journalist
kevinbloom@mac.com
+27 83 254 2616

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