Eskom’s loss to Econ Oil in R5.2 bn tender feud embarrassing for de Ruyter
Last week Eskom, under the leadership of Andre de Ruyter, lost another round in its bitter R5.2 billion fuel tender feud with black-owned Econ Oil and Energy.
The power utility has attempted on numerous occasions to convince the government and the people of South Africa that Econ Oil applied underhanded tactics to win a lucrative five-year contract, but all those attempts failed dismally.
On one of those attempts the Treasury, after receiving a request from the parastatal to undo the deal, warned Eskom about the repercussions of doing so.
In a written reply to the request, the National Treasury stated that it was not clear how the parastatal would defend itself against possible litigation from service providers who had been served with letters of award.
The reply made it clear that the cancellation was not supported as the reason for the cancellation was not in line with the Preferential Procurement Policy Framework Act of 2017.
Eskom was further advised to take into consideration the issues raised and refer the matter back to the BEC (bid evaluation committee) and BAC (bid adjudication committee).
At the time, Econ Oil had taken Eskom’s move for adjudication, with the power utility challenging and questioning the adjudicator’s jurisdiction on the matter.
Even advocate Wim Trengove, in his forensic investigation into the matter, stated that the cancellation was effected based on unproven allegations.
The adjudicator advocate, Kevin Trisk, ruled that a contract existed between the two parties.
Will that ruling block Eskom from pursuing this, and will Treasury take any action given that it had warned the power utility against cancelling the contract, citing litigation costs should those served with letters of award decide to go that route?
It is difficult to guess Eskom’s next move after last week’s loss as the power utility has taken the stance of not entertaining media questions relating to this matter.
The defeat is embarrassing for the power utility’s chief executive because the government had warned them against cancelling the deal, yet the parastatal went ahead and got lost in a bitter feud with the company, a move that will undoubtedly have massive ramifications for the state-owned enterprise.