Tender process was fair — Areva
FRENCH nuclear firm Areva yesterday defended Eskom’s decision to award it the R4.3bn Koeberg tender, saying the tender process was highly detailed and substantively fair.
FRENCH nuclear company Areva yesterday defended Eskom’s decision to award it a R4.3bn tender to replace steam generators at the power utility’s Koeberg nuclear power station, saying the tender process was highly detailed and substantively fair.
A central issue in the court battle between Eskom, Areva and American company Westinghouse, which lost out on the tender, was whether Eskom’s decision was based on criteria introduced late in the day, as claimed by Westinghouse. Areva yesterday argued that Eskom’s original tender requirements covered all the factors considered by Eskom.
Koeberg contributes 5% (1,960MW) to Eskom’s overall electricity supply, but it is SA’s only nuclear power station and is considered crucial in the government’s long-term nuclear commitment of 9,600MW by 2023.
Over three days, the Johannesburg High Court heard that while Westinghouse’s bid was cheaper, Eskom’s board tender committee favoured Areva because of “strategic considerations” and because Areva, in its schedule for completing the job by 2018, detailed how it could give a three-month margin for error — a “float”. Westinghouse did not detail its own float, saying it would only do so once the tender had been awarded.
On Tuesday counsel for Westinghouse, Jeremy Gauntlett SC, said these strategic considerations and the float were introduced at the last minute and were a deviation from the original criteria.
But counsel for Areva, Peter Hodes SC, said yesterday that if the tender requirements were read reasonably — as required by the law — everything was covered. There was “no need to resort to complex legal argument” because the facts answered the question.
While the board tender committee’s letter to Public Enterprises Minister Lynne Brown did not explicitly mention a float, it did clearly refer to the importance of bidders’ ability to meet the 2018 deadline and the associated risks, said Mr Hodes.
Westinghouse used an “ill-considered negotiating technique” when it refused to disclose details of its own float, said Mr Hodes. “You make your bed, you lie in it,” he said.
The standards for the tender requirements demanded by Westinghouse were so high that they were “untenable and impractical and not required by law”.
But Mr Gauntlett hit back, saying that Mr Maleka had, on Tuesday, “conceded” that the strategic considerations were not part of the original tender requirements.
He said the rules had been set; and if the rules were to change, the game had to be restarted.
Judge Zeenat Carelse reserved judgment.