FORMER Eskom chief executive Andre de Ruyter defied an instruction from the National Treasury and interfered with the procurement process when he disqualified six companies from a three-year tender for the supply delivery and offloading of fuel oil to all Eskom’s coal-fired power stations on an “as to when required basis for three years”.
The Falcons has documents containing letters between Eskom and the National Treasury dated December 7, 2021, and December 20, 2021, where the power utility sought approval to deviate from the request for six tenders that had provided letters of support capacitating them in their obligation to deliver on the supply delivery and offloading of fuel oil to Eskom.
In the letter from Eskom dated December 7, Eskom’s acting chief procurement officer said that the request came after Afrik Energy, Kamoso Fuel and Gas, Crenergy, GTL Petroleum, Vhangwena Business Enterprise, and Energgrade had received letters of support from Econ Oil, a black female-owned company that De Ruyter suspended when he took over the power utility.
“The six suppliers submitted letters of support from Econ Oil and Energy, a supplier which Eskom has resolved to suspend and blacklist. Eskom is currently busy with the process of blacklisting the supplier from its database and subsequently informing the National Treasury of such a decision.
“Eskom, therefore, requests approval to request the six tenderers to submit new information relating to a letter of product source and a new data sheet (technical information) for fuel oil other than the Econ Oil letter and datasheet,” read Eskom’s letter.
The power utility further said that the six suppliers disqualified from the process were due to a legal opinion concluding that the suspended supplier would indirectly benefit from an Eskom tender.
The R13 billion open tender (CORP 5466) was issued to the open market on July 2, 2021. The tender closed on 28 July 2021 at the MWP tender office. The evaluation process commenced on August 4, 2021, at C-Max and was completed on October 21, 2021.
On December 20, 2021, the Treasury wrote to De Ruyter informing him that his request to disqualify the six companies was unjustifiable.
“The reason to request approval to allow bidders to re-submit information after the closing of the bid is not possible as this may jeopardize the fairness of the process. The reason to also exclude their letters based on a supplier who is not fully restricted is not justifiable.
“National Treasury does not support the request to ask the six suppliers to submit the new information as that will affect the evaluation process that has already happened. Should any of the suppliers not be able to obtain the required new information from another supplier that may jeopardize the fairness of the procurement process. Eskom should proceed with the evaluation process.
“The Institution must ensure that any contract for goods and services is in accordance with a fair, equitable, competitive, and cost-effective system,” read the Treasury’s letter.
However, the Treasury’s instruction fell on deaf ears as De Ruyter showed defiance when he subsequently disqualified the six companies and failed to provide documentary evidence restricting Econ Oil from doing business with Eskom.
Attempts to solicit a comment from De Ruyter who is reportedly in Germany failed as his contact number appeared to no longer work as messages and calls did not go through.
Approached for comment, the Treasury stated that Econ Oil was not blacklisted.
“In August 2022, Eskom wrote to National Treasury requesting the department to restrict Econ Oil from doing business with the state and include them in the list of blacklisted companies. National Treasury considered the request and wrote back to Eskom in September 2022, requesting further information as per procedure, before action could be taken.
“When an organ of state requests that a company be placed on the database of restricted or blacklisted companies, they need to furnish documentary evidence to ensure a fair process.
“National Treasury requested documentary evidence from Eskom, which was never submitted to National Treasury by Eskom. The matter is now between Eskom and Econ Oil, as the company has instituted legal action against Eskom,” said the Treasury’s media desk.
Eskom refused to respond to the Falcons’ 20 questions relating to the contract and the disqualification of the six companies including the status of Econ Oil’s legibility to conduct business with the entity.
“The matter is the subject of litigation, therefore, we are not in a position to provide a response to your questions,” replied Eskom’s media desk.
Econ Oil boss Nothemba Mlonzi said that she could not comment as the matter was before the courts.