State-owned utility Eskom says the National Treasury’s relaxation of some procurement and supply chain management rules and processes contained in the Public Finance Management Act (PFMA) will assist it in speeding up critical and urgent procurement.
The amendment, which is outlined in an instruction note that became effective in April, will also empower it to engage directly with original equipment manufacturers (OEMs) and maintenance suppliers.
The note also provides Eskom with flexibility over expansions, deviations and the handling of urgent procurement matters.
Eskom CEO André de Ruyter has, on several occasions, raised PFMA processes as a constraint to efficient procurement.
He has even indicated that it was taking 77 days on average for PFMA enquiries and requests to be resolved by the National Treasury – a claim that the department denied.
Chief procurement officer Jainthree Sankar says the amendment will “give Eskom back control over the most critical and urgent of its procurement”.
“In the plan to drive efficient procurement and engaging with OEMs and maintenance suppliers, this measure supports the efforts for Eskom power stations and operating units to work faster and more efficiently on procurement of what they need at an operating level,” Eskom states.
De Ruyter has also confirmed recently that Eskom intends procuring engineering and maintenance services from OEMs in the coming months to supplement its skills base at power stations that have become prone to repeated unplanned breakdowns.
Sankar suggests that the amendment reflects growing trust in the utility by the National Treasury and the Department of Public Enterprises.
Eskom insists, however, that it will continue to maintain the principles of Section 217 of the Constitution in that competitive bidding be the usual mechanism for procurement, with deviations remaining the exception rather than the norm.
“The overall intent of the relaxation is to ensure the swift and flexible implementation of the procurement processes in a way that takes into account the core principles of the PFMA while ensuring fairness in procurement processes.”