Nu­clear firms at log­ger­heads over Eskom’s ‘un­law­ful’ Koe­berg ten­der award as the elec­tric­ity gi­ant con­tests court rul­ing

CityPress - - Business -

“This is both new and un­true.” Cit­ing an Eskom study, West­ing­house ar­gued that X23 was not “an im­mutable dead­line”. The com­pany also ar­gued that, de­spite the work that had be­gun, “Areva has con­sid­er­ably de­layed the im­ple­men­ta­tion of the ten­der and will not … meet X23”. West­ing­house be­lieved the re­place­ment steam gen­er­a­tors could be safely in­stalled dur­ing fu­ture shut­downs at Koe­berg. At the last minute, West­ing­house lost the Koe­berg ten­der to Areva. On each pre­vi­ous oc­ca­sion, Eskom’s tech­ni­cal and ex­ec­u­tive teams had rec­om­mended West­ing­house, only to be over­ruled at ei­ther board or min­is­te­rial level. Court doc­u­ments show that both com­pa­nies had neck-and-neck tech­ni­cal of­fer­ings, with West­ing­house com­ing in cheaper and of­fer­ing more in terms of lo­cal­i­sa­tion. Eskom ar­gued that Areva had squeezed out West­ing­house at a so-called penalty shoot-out a month be­fore the ten­der win­ner was an­nounced. It was here that the ad­di­tional “strate­gic con­sid­er­a­tions”, which Eskom says gave Areva the edge, sur­faced. De­spite the shoot-out, Eskom’s tech­ni­cal ex­perts ul­ti­mately handed a rec­om­men­da­tion to the paras­tatal’s board ten­der com­mit­tee to award the ten­der to West­ing­house, but in a se­cret bal­lot the board re­versed the de­ci­sion.

Eskom then ex­plained the de­ci­sion in a let­ter to Public En­ter­prises Min­is­ter Lynne Brown, out­lin­ing five “strate­gic cri­te­ria” that the com­mit­tee had con­sid­ered when it made its de­ci­sion.

Eskom also later ad­mit­ted in the South Gaut­eng High Court that a three-month “float” in Areva’s project plan to re­place the steam gen­er­a­tor was in­di­cated as a de­cid­ing fac­tor.

Koko con­ceded in the high court that the strate­gic con­sid­er­a­tions were not part of the ten­der eval­u­a­tion cri­te­ria.

How­ever, the ap­peal court found that each cri­te­rion was in­tro­duced af­ter the ten­der cri­te­ria had al­ready been set and were, there­fore, in­serted un­law­fully into the process.

Eskom is op­ti­mistic that the Con­sti­tu­tional Court will view the con­sid­er­a­tions in a dif­fer­ent light.

Eskom in­sid­ers have told City Press that if the ten­der was to be reis­sued, it could take from six months up to a year be­fore it could be awarded again.

West­ing­house hopes that the Con­sti­tu­tional Court will go one step fur­ther than the supreme court did, and award it the con­tract out­right.

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