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Judgment reserved in Eskom, Econ Oil saga

By Thabo Makwakwa Time of article published Jun 10, 2021

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DURBAN - EMBATTLED power utility Eskom made an unexpected U-turn in the South Gauteng High Court on Wednesday when it appeared to concede that there was no evidence of corruption when it decided to set aside a multibillion-rand fuel supplier contract belonging to a black female-owned company.

In a long and bruising battle between Eskom and giant fuel supplier Econ Oil, judgment was reserved in the showdown involving the two, moving an inch closer to bringing the controversial saga to finality.

Judge Bashier Vally, who was presiding over the matter, informed both parties that his written judgment would be hand-delivered to them in due course.

Eskom lawyers Advocate Wim Trengove SC, Carol Steinberg SC and Michael Mbikiwa SC asked the court to review and set aside the multibillion-rand contract that Eskom awarded to Econ Oil.

Trengove and his team argued that the entity’s tender had been irregular on the basis that it violated its own procurement rules.

In a surprising twist, Trengove’s main ground of argument was that the entity’s procurement team was incompetent, rather than corrupt, as was previously said by the power utility’s spokesperson and embattled chief executive.

Throughout the proceedings was the absence of all the corruption allegations levelled against Econ Oil since the beginning of the announcement of the cancellation of the fuel oil contract by Eskom group chief executive Andre de Ruyter in March last year.

Trengove argued that no technical evaluation had been conducted by the board that approved the contract, and there were no standard financial parameters to determine the tender pricing.

“The board breached its own policy in terms of procurement processes,” said Trengove. In his affidavit, De Ruyter alleged that the process was jettisoned by the finance committee of the Eskom board by giving the mandate to go and negotiate, as that process resulted in Econ Oil being awarded a tender for at least 11 power stations.

Econ Oil’s advocate, Hilton Epstein SC, then argued that Eskom overlooked its own tender processes and therefore the review application should not be entertained as this was not Econ’s fault.

“None of the grounds presented by Eskom is a ground of a negotiation process,” Epstein said. “Eskom only presented a review of a tender process. All of the grounds that Steinberg addresses the court on are not applicable, because this is not a tender.

“The acceptance of the tender is a binding contract, not the signing thereof.” During the presentations, both parties agreed there was no interference in the negotiation processes and that no misconduct can be attributed that resulted in that outcome, either by Eskom’s staff or by Econ Oil.

Eskom, towards the end of last year had initiated a court appeal that sought to stall the arbitration report by Kevin Trisk SC, which found that there existed a contract between the two parties.

The dispute arose from a tender process that culminated in Eskom’s board resolving to award a contract for the supply of fuel oil to various bidders including Econ Oil, Sasol and FFS refineries. The combined value of the award was at least R14 billion.

Econ Oil’s Nothemba Mlonzi said she was happy the matter had been heard through the court, stating that she believed her company had done everything according to the book.

Eskom’s spokesperson, Sikonathi Mantshantsha, said the entity would not comment on the matter as it was currently before the court.

Daily News

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