Eskom deal may have broken law

Eskom may have broken tender laws in concluding a 2005 agreement with Black & Veatch Corporation that increased more than 100-fold in cost, according to a probe of the contract commissioned by the utility.

A former High Court judge who conducted the investigation questioned why the cost of the continuing contract increased to more than R14 billion from an initial R114 million. He said the deal should be investigated.

“This contract, and the allocation of funds, may not have met the requirements of the tender law in that it was an open tender, subject to abuse without finite limitations,” Nazeer Cassim, the former judge, said in his report on the probe. “It may be prudent to investigate the particularities justifying the increase” to assess whether there was “improper conduct”.

Black & Veatch denied any wrongdoing. Eskom declined to comment.

Eskom hired Black & Veatch to help provide engineers and other specialists needed to build the Medupi and Kusile coal-fired power plants, both of which have run over budget and are behind schedule. It also helped with the Ingula pumped-storage facility, Cassim said.

Black & Veatch said it was appointed under a transparent procurement process and its contract had been scrutinised by Eskom and the government.

“Our original mandate was to provide Eskom with the experience and resources necessary to execute this critical project, not as a labour broker,” the company said in a response to queries. – Bloomberg