Letter to Gordhan accuses Eskom bosses of ’purging’ black suppliers
Johannesburg - Eskom boss Andre de Ruyter and other managers are accused of purging black suppliers and using racism to deal with them.
This was revealed in a letter written to Public Enterprises Minister Pravin Gordhan by now-suspended chief procurement officer Solly Tshitangano.
In his letter, Tshitangano detailed how De Ruyter and other white managers were trying to push out Econ Oil from the power utility’s supplier database without following due processes.
“This letter requests your urgent attention to address the unequal treatment of suppliers by Andre de Ruyter and other Eskom officials. The activities that are taking place in Eskom reminds me of the painful past which I thought was behind us, that period where colour was the determining factor in how one is treated and which rights one will enjoy,” Tshitangano wrote.
He accused De Ruyter of gunning for Econ Oil at all costs. The company and Eskom are at loggerheads over the cancellation of a R5.2 billion fuel supply contract. A forensic investigation conducted on behalf of Eskom recommended “the immediate suspension and ultimate de-registration of Econ Oil from the Eskom vendor database”.
Tshitangano, however, raised questions with regards to how matters of different companies were being handled. In one case involving a white company, Rula Bulk Materials Handling, De Ruyter questioned why the company was not given a right to make a representation before it was deregistered.
“Andre sent an email to me, Pieter le Roux, Jan Oberholzer and Bob Sookrajh on 16 August 2020. Paragraph one of the email read as follows: ‘I would like to receive a report on this matter asap, including the submission made to the Supplier Review Committee, and the minutes of the meeting where the decision was taken. It appears that there is at least a prima facie case if the Audi alteram partem rule is not being applied’,” he wrote.
“Andre gave the benefit of the doubt to Rula Bulk Materials Handling even before reviewing the correspondences between the company and the supplier review committee. Rula Bulk Materials Handling is a white-owned company; it is therefore a problem if action is taken against a white-owned company without applying the Audi alteram partem rule.”
Audi alteram partem (or audiatur et altera pars) is a Latin phrase meaning “listen to the other side” or “let the other side be heard as well”. It is the principle that no person should be judged without a fair hearing in which each party is allowed to respond to the evidence against them.
Tshitangano said two months after raising the Audi alteram partem rule in relation to a white company, De Ruyter does not have a problem accepting the recommendations from the forensic investigation that Econ Oil should be suspended from the Eskom vendor database without applying it.
Gordhan’s spokesperson Richard Mantu failed to respond to specific questions relating to the letter and instead said: “The matters are being dealt with by the board and management where relevant. Please address your inquiry to Eskom.”
Eskom spokesperson Sikonathi Mantshantsha said Tshitangano had been placed on precautionary suspension pending a disciplinary process into his performance. Tshitangano had been given until February 24 to make representations as to why the precautionary suspension should not be rendered effective.
Mantshantsha also denied allegations against De Ruyter, saying he “has at all material times executed his duties as the CEO (chief executive) in a professional and unbiased manner”.
“This he does without favouring or prejudicing any particular supplier, nor the group of suppliers. At all material times, he has performed his duties to advance the best interests of Eskom.”
The battle between Eskom and Econ Oil started Last January when the head of legal and De Ruyter exchanged emails about the cancellation of a five-year bid/ contract awarded which was awarded but cancelled by the board in 2020.
A letter to the Eskom board chairperson Professor Malegapuru Makgoba revealed that six days after assuming office, De Ruyter immediately kickstarted the process to cancel the contract. De Ruyter appointed an ex-Sasol employee Werner Mouton, to build up reasons why the bid should be cancelled.
According to documents, on January 29 last year, Mouton wanted a meeting set up with the Sasol team, one of the winning bidders, to “go through pricing formula”, including Econ Oil and FFS. On the same date, an email by De Ruyter read: “Please revert to Econ, stating that the tender award has been delayed and that we are going to engage with the bidders.”
Tshitangano alleged that De Ruyter further asked if he “intended to issue a new tender or re-engage and push for lower prices”. During this time, De Ruyter apparently did not make any corruption claims against Econ Oil until February 5, when Mouton prepared his report.
A day before the Mouton report, De Ruyter apparently pushed for “feedback on the cancellation of the tender”.
Tshitangano stated in his email that De Ruyter was pressuring him and Bartlett Hewu (former head of legal) to manufacture reasons to cancel the fuel oil bid.
The Eskom board was requested to cancel the contract in March last year before any investigations from the letters and communication.
Last year, the Sunday Independent reported that the stand-off with the contract resulted in Eskom board member, Sifiso Dabengwa, resigning towards the end of 2020 after the board decided to cancel the contract.
At the time, Dabengwa believed the board was using a report by advocate Wim Trengove SC as motivation to cancel the contract with Econ Oil & Energy. In his resignation letter to Gordhan, Dabengwa said he disagreed with the report’s findings.
“To date, there has been no evidence of fraud and corruption to the tender in question,” Dabengwa wrote.
IN A press statement at the time, Eskom said it had commenced a process to cancel the fuel oil supply contract awarded to Econ Oil & Energy during 2019.
Coal tycoon Joe Singh of the Joe Singh Group of Companies has been entangled in legal battles with the power utility as he tries to have contracts that were allegedly unlawfully cancelled reinstated.
Their battle escalated when the power utility and the Special Investigating Unit (SIU) took former Eskom executives to court last year.
In their court papers, Eskom and the SIU made reference to an email from Just Coal, one of Singh’s companies, to Eskom discussing the decision to terminate the agreement.
Matshela Koko allegedly leaked the email to members of the Gupta family. They were at the time direct competitors to Just Coal for the supply of coal to Eskom through their ownership of Optimum Mine at Tegeta. Despite such documents and evidence that the power utility now relies upon to recoup over R3bn from the former executives, Eskom still refuses to reinstate Joe Sign Group contracts.
Eskom alleged that they had received information from an informer that Just Coal was supplying substandard coal to Tutuka Power Station, thus not adhering to the contract terms.
Singh and his company are demanding over R2bn from the power utility for the unlawful cancellation.