Areva contends it must keep Eskom tender as delays will affect safety

FRENCH nuclear specialist Areva wants a R5bn contract awarded to it by Eskom to stand even though the Supreme Court of Appeal has ordered that it be set aside.

Even if there were irregularities, the Constitutional Court should allow it to keep the tender, Areva has argued in papers before the top court. The practical implications of the dispute between Areva, Toshiba subsidiary Westinghouse and Eskom over the tender to replace six steam generators at Eskom’s Koeberg nuclear plant are becoming clearer as the 2018 deadline for completion of the reburbishment looms.

Westinghouse challenged Areva’s winning of the tender and in December the Supreme Court of Appeal set aside the decision but refused to order that it be awarded to Westinghouse. It instead left it up to Eskom to retake the decision.

Eskom had argued that Areva had got the contract due to “strategic considerations” and the Supreme Court of Appeal said if Eskom believed the considerations were “vital”, it should begin afresh and properly include them in its evaluation.

Areva is now arguing that a significant delay to the project would not be safe.

Westinghouse wants the Constitutional Court to do what the Supreme Court of Appeal did not and order that the work be given to it.

Areva, which has been working on the project since September last year, wants the court to overturn the judgment of the Supreme Court of Appeal, arguing that the tender was awarded “lawfully, reasonably and fairly”.

But, even if the highest court were to decide that there were “material irregularities”, it should leave the tender undisturbed, said Areva.

Areva’s counsel, Peter Hodes SC, said this was the kind of exceptional case that would warrant such an order.

SA needed stable and abundant electricity urgently and since Areva had long started work on the project, it would be able to deliver on the project “significantly faster” than Westinghouse.

“Delay is highly undesirable and even dangerous,” Mr Hodes said.

“Koeberg is ageing. And the court does not need new or expert evidence to know that any risk in the context of

nuclear power must be treated with extreme caution,” he said.

The recent decline in the value of the rand would make a new tender award “conservatively, many millions of rands more expensive”.

There was no suggestion that there was fraud or corruption in the awarding of the tender to Areva, he said Mr Hodes.

Westinghouse’s legal argument is yet to be filed. But it has asked the court to allow it to admit new evidence to support its arguments that if it were to be awarded the tender immediately, it could still do the work within a time frame that would be safe and cost-effective.

But Mr Hodes said the new evidence should not be allowed because Areva had disputed every Westinghouse contention . The disputes were so substantial that to resolve them on paper without cross-examination — and as the first and last court, would be highly undesirable, he said.

As a court of appeal, the Constitutional Court does not hear oral evidence with cross-examination, which is seen as the best way to resolve factual disputes.

Westinghouse’s attorney Trevor Versfeld said it would respond to Areva’s arguments when the company filed its own arguments today.