Eskom confirms contractual dispute with Oracle

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The Oracle building in Woodmead, Johannesburg.
The Oracle building in Woodmead, Johannesburg.

Power utility Eskom has confirmed it is involved in a contractual dispute with the South African arm of Oracle Corporation, which is contracted to provide a number of technical services to the state-owned company.

According to the power utility, Oracle first claimed it had been underpaid by an amount of approximately R7.3 billion, which underpayment is disputed by Eskom.

Eskom says eventually the amount claimed by Oracle was reduced to just under R400 million.

During the weekend, Sunday World first reported that almost the whole of South Africa is at risk of being plunged into total darkness, “potentially endangering the life, personal safety, or health of the whole or part of the population”, as the country faces a real possibility of coming to a standstill.

The report says this is according to Eskom, which on Thursday lost a court battle to stop Oracle Corporation from withdrawing its crucial services over a dispute relating to billions of rands owed by the power utility.

It adds that Eskom uses Oracle’s products and services for load monitoring of electricity generation by power stations.

As far as Eskom is concerned, the amount due to Oracle is approximately R166 million in total, the state-owned enterprise says.

Eskom claims it offered to settle the R166 million, and proposed a verification and court process in order to legally and sustainably resolve the dispute.

When Oracle rejected this approach, threatening to terminate its services, Eskom approached the High Court to compel Oracle in essence to continue providing the technical support services for the duration of the agreement until April 2022.

According to the power utility, 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 have 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,” the parastatal says.

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

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