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Eskom in nasty contractual dispute with Oracle

Tech giant has claimed it is owed R7.3bn by the utility.
Image: Bloomberg

Eskom said on Monday that it has put “contingency measures” in place to reduce the risk of its reliance on software from US technology giant Oracle, with which it is in a heated contractual dispute.

The state-owned electricity utility said Oracle is contracted to provide several technical services but the company, which is based in Austin, Texas, has claimed it is owned R7.3 billion. Eskom has disputed this claim.

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Oracle is a major player in enterprise business software, including ERP and database solutions. It was co-founded by Larry Ellison, the 10th richest person in the world according to Bloomberg, and who now serves as chairman and chief technology officer.

Eskom said the amount claimed by Oracle has been reduced to less than R400 million through negotiation, but the utility believes the amount owing is far less: R166 million.

“Eskom offered to settle the R166 million and proposed a verification and court process to legally and sustainably resolve the dispute,” the utility said in a statement.

“When Oracle rejected this approach, threatening to terminate its services to Eskom, 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.”

Leave to appeal

Eskom said the court dismissed its application last week and it will now seek an application for leave to appeal. “Eskom has assessed the risks in the event of Oracle withdrawing technical services support (and) has interim risk-mitigating processes in place to reduce the risk of its operations being disrupted.”

Sunday World first reported on the dispute at the weekend, under the headline “SA faces total blackout”. The newspaper said: “The whole of South Africa is now at the mercy of Oracle to save it from plunging into darkness and keep the lights on after the acrimonious fallout that saw Eskom fail to convince the Johannesburg high court to stop Oracle from withdrawing its crucial services to the embattled state-owned company.”

According to the report, Oracle’s software is used in critical Eskom operations, including an “online vending system” that processes 77 million transactions of electricity sales a month.

Eskom also reportedly uses Oracle products and services for load monitoring of electricity generation by power stations and has supplied a maintenance tool called Maximo used for asset management and power outages, logging of faults and control of the grid.

In Monday’s statement, Eskom said it finds the manner in which Oracle has handled the matter “regrettable”. The utility said it will “pursue all legal avenues and will not be bullied into paying any monies outside of the legal processes”.

A spokeswoman for Oracle couldn’t immediately be reached outside normal business hours.

© 2021 NewsCentral Media

This article was first published on TechCentral here.

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Sounds just like the insane thing the brainless useless ANC=Eskom would get involved in despite the danger to the country.

Proof-read your headlines at least

Is Oracle unhappy perhaps due to a contraction on the gravy train?

In the Telecom industry R7.3b would cover technical support many times over.

Don’t know who is right or wrong in this matter, but kicking back at the exorbitance of the large systems suppliers is a virtue in Disselboom’s simplified view of life.

Got a niggly feeling that the foreign suppliers perhaps find it difficult to get used to dealing with the improved competence and business orientated ways in the board room and senior Eskom management.

Oracle vs Eskom – guess who will win? Dumb f%$#***. Morons can’t even generate electricity (core business) but now they will take on one of the most financially strong companies on the planet? I HATE big tech but I DESPISE SOEs.

I work as a software engineer and can say that I really dislike Oracle. I would go so far as to say I would take Eskom’s side on this! Oracle is used to being in the court by now.

Agreed with you. They also have a low water mark for their ethics that I can state.
And they have recently LOST their Copyright Infringement case against Google for JAVA. Shame neh!!!

Agree. Having worked in Capacity Management (software & Hardware), I have had a few run-in’s with Oracle and they are ethically challenged. However, Eskom should have managed their Oracle product usage better and are fully to blame because Oracle’s reputation is widely known.

This smells a bit like that Transnet contract with China.

Or, somebody must explain the cost-per-seat maths on R7,000,000,000 claim.

Yes it just seems like that deal too or similar to Hitachi Power, let’s not forget the Optimum Coal and Eskom deal too, “the down payment eskom made to OC to supply coal to Eskom, do the price per ton may be fixed outside market rates regardless of coal grade quality and then CR which holds direct interest into OC coal via shanduka it just gets very interesting how the deals get done in the dark. So someone needs to explain that 7 bil or is this another China Rail and Transnet example, it pays to be a dirty corporation in SA the state and big business colludes together in some instances, the honest business suffered dye to suffocation by the state and bullying by big businesses.

One has to wonder if Oracle has anything to do with the Texan electrical utility that recently imploded under adverse weather conditions? If so,perhaps they are under even more pressure now to find additional revenue which does not bode well for Eskom. Just a thought!

The real issue is that Jamnadas and the ANC is learning the hard way who the real boss is on this planet: And its a very fluid fellow called global capital. That’s right-if Oracle want to destroy Eskom down they have far more leverage than the EFF dancing ground forces or the ANC Seals in MKV led by Field Marshal Niehaus .

We need to understand who we are and where we fit in-Apple is worth more than the entire JSE-Mr Musk is worth a 1/3 of our annual GDP. We are irrelevant.

End of comments.

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