Alarm as Eskom tops list of tender benders
Utility asked for pass on procurement of R31bn Raises new questions about governance at power provider
Eskom heads the list of government departments and agencies seeking permission to deviate from normal procurement procedure, with the utility’s requests amounting to R31.3bn of the total R37bn worth of deviations requested in 2016-17.
This raises new questions about governance at Eskom, which is in the throes of state-capture allegations centred on the Gupta family.
Just last week, Eskom demanded that consultancy firm McKinsey, with its partner, the politically connected Trillian consultancy, repay a total of R1.6bn in fees, saying the contract that facilitated this did not meet legal requirements.
It also comes at a time when acting chief procurement officer Willie Mathebula is said to be leading a bid to overturn regulations that compel state entities to seek permission from the Treasury when they want to deviate from normal tender processes.
The procurement deviation was permissible for entities and departments in cases where goods or services were supplied in an emergency or where the supplier was the sole provider of the goods and services being procured, said Mathebula.
Mathebula was briefing members of Parliament’s standing committee on finance on Wednesday.
It was also his first briefing since he replaced Schalk Human at the helm of the office of the chief procurement officer in September.
Mathebula said the office received 800 requests for deviations from state entities in 2016-17.
However, he pleaded ignorance on whether his office had a framework to guide it in declining variation requests.
The briefing on Wednesday also took place at a time when parliamentarians are wary of plans to adjust procurement guidelines and Treasury regulations that will do away with the requirement to apply for procurement deviations, expansions and variations.
Mathebula said his office had reviewed 263 contracts valued at more than R10m, with 260 pertaining to the Passenger Rail Agency SA and the rest from Transnet and the South African Broadcasting Corporation.
The Eskom contract review related to verification of the utility’s compliance with the supply chain management framework when appointing coal suppliers. Framework compliance was the subject of investigation in the other reviews as well.
Mathebula said Eskom accounted for the lion’s share of the value of contracts, worth a total of R31.3bn, for which deviations were sought. This was leagues ahead of the South African Revenue Service, which had the second-highest quantum with R1.2bn.
The Treasury, under which the office of the chief procurement officer falls, approved 450 of the 793 applications received in the financial year for permission to deviate from procurement guidelines. The procurement office also approved 398 of the 756 applications to either expand or vary the scope of a transaction from previous cost specifications.
Committee member and ANC MP Derek Hanekom asked Mathebula if he had found any corruption in the procurement function of entities since he
became acting chief procurement officer.
“What do you do when matters come to your attention that are not just deviations but are violations of the systems and a dereliction of the procurement laws and guidelines?” Hanekom asked.
Mathebula said he had uncovered no cases of corruption, leaving members of the committee incredulous.
DA MP David Maynier questioned Mathebula on reports that he believed the mandate of his office needed an adjustment.
“Reports suggest that you believe that the [office of the chief procurement officer] behaves as a dictator rather than an enabler.
“Is that your view and do you support the idea of a review of the [office of the chief procurement officer]? If that is the case, it suggests that you would support voluntary defaming of the [procurement office] and Treasury,” said Maynier.
Mayihlome Tshwete, spokesman for Finance Minister Malusi Gigaba, promised to get back to Business Day on questions sent, but had not commented at the time of publication.