Eskom CEO chastised by Treasury

● National Treasury has read the riot act to Eskom CEO Andre de Ruyter, telling him to desist from “hand-picking” service providers for the power utility as such conduct is against government procurement laws.

Treasury officials threw the rule book at De Ruyter in a letter sent to him on March 12 after he told parliament’s standing committee on public accounts (Scopa) earlier last month that he had personally ordered Eskom to include four companies chosen by him in a pool of potential service providers.

De Ruyter told MPs that he wanted the four unnamed companies to be included as Eskom service providers because they brought much-needed expertise and innovation to the struggling utility, especially in the maintenance of boiler tube ferrules.

The issue was first raised by EFF MP

Mbuyiseni Ndlozi and other members of Scopa, who said the matter was of concern and vowed to seek a legal opinion on De Ruyter’s conduct.

Now the Treasury’s chief director of supply chain management, Basani Duiker, has chastised De Ruyter, stating that his conduct was not consistent with the constitution and other public legal prescripts on the procurement of services.

Duiker told De Ruyter that while supply chain management (SCM) stipulations allowed accounting officers or CEOs of parastatals to depart from competitive bidding processes where it was necessary to do so, they were prevented from doing so without approval from the Treasury.

“National Treasury therefore would like to caution Eskom on utilising practices that are inconsistent with the provisions of national legislation and applicable prescripts.

“Hand-picking of service providers is in direct contravention of legislation and SCM prescripts as provided above, and therefore render expenditure incurred through these service providers irregular,” she added.

IFP MP Mkhuleko Hlengwa, the chair of Scopa, said the standing committee was in full support of the Treasury’s letter to De Ruyter.

Hlengwa also said that as far as Scopa was concerned, the companies hand-picked by De Ruyter were now automatically disqualified from conducting any future business with Eskom because “they already have an unfair bias” in comparison with other service providers and because due process was not followed.

Eskom spokesperson Sikonathi Mantshantsha on Friday insisted the companies introduced by De Ruyter were not providing any service to Eskom and had merely been added to the pool of potential service providers.

“There’s been no and there will be no contract or any kind of agreement that will be awarded to these companies without going through a competitive process set out in the law,” Mantshantsha said.

Hand-picking ... is in direct contravention of legislation

Basani Duiker

Treasury's chief director of supply chain management