ConCourt reserves judgement in Eskom tender matter

ConCourt reserves judgement in Eskom tender matter

Eskom has found itself between a tender and a hard place. The Constitutional Court today reserved judgement in a tender dispute over which company should replace six steam generators at the Koeberg nuclear power station in the Western Cape.

Constitutional Court Concourt_gallo
File photo: Gallo Images

Eskom and Areva, the winning bidder, wants the court to give them the go ahead in order for the power utility to meet its 2018 deadline, which it considers a nuclear safety priority.

Westinghouse, the losing bidder, maintains that Eskom did not follow the correct procedures and in fact, changed the rules of the game when it wasn't allowed to do so.

"(Westinghouse) knew that it was in the protection… of the Eskom policy, which says that you can't add on," argued Advocate Jeremy Gauntlett for Westinghouse.

The companies were both successful in the initial tender and were invited back in 2012. While Westinghouse was initially recommended, Eskom decided in 2014, after extensive recommendation, to award the contract to Areva. A deciding committee resolved to award the tender to Areva as it was advised it would be in the power utility's best interest. 

Eskom is appealing a ruling by the Supreme Court of Appeal which instructed the power utility to reconsider the matter. The court found that it was unfair for Eskom to not inform either of the companies of "strategic considerations" which convinced Eskom to choose Areva.

Westinghouse applied for a cross-appeal because it does not want the tender process to be repeated, as the Appeals Court ordered, but that the court replaces it with Areva as the successful bidder.

However Advocate Vincent Maleka, representing Eskom, argued that the decision of awarding a tender was ultimately at Eskom's discretion.

"The ultimate purpose of the negotiations was to afford Eskom an opportunity to see who of the competent bidders would most meet its strategic desire," Maleka said. 

He explained that it is within Eskom's rights to award a tender to the company most likely to promote the company's objectives and policies.

"The tender evaluation process will be based on evaluating the overall value to Eskom rather than the tendered prices only," Maleka added.

Should the R4.3 billion contract not be completed by the deadline, Africa's only nuclear power station could experience outages, returning the nightmare of load shedding for South Africans.

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