Big fight over R8 billion oil contract at Eskom

Advocate Nazeer Cassim SC has recommended that the Eskom board be held accountable for awarding an R8 billion contract to Econ Oil, the Sunday Times reported.

According to the paper, the Eskom board is getting ready for a fight with Cassim after he recommended that action be taken against them in the same report that he recommended the dismissal of former chief procurement officer (CPO) Solly Tshitangano.

A civil case between Eskom and Econ is currently before the High Court in Johannesburg, with Eskom seeking to have the contract overturned. The power utility is also asking that Econ pay back R1 billion that Eskom claimed it overpaid during the course of its relationship with the oil supplier.

Non-executive interim chair of the Eskom board Malegapuru Makgoba told the Sunday Times that he thinks it’s important to wait for the court’s judgement before the board responds.

Econ Oil has previously denied allegations of improper conduct. “We are a company built on the back of strong company values, delivery, and ethical conduct in our business,” Econ Oil stated.

Tshitangano called for an investigation into the board’s conduct. Among his earlier allegations was that Eskom CEO Andre de Ruyter racially discriminated against Eskom suppliers.

Minister of Public Enterprises Pravin Gordhan tasked the Eskom board to investigate the allegations. The board appointed Advocate Ishmael Semenya SC to investigate the allegations, and Semenya reported that he found no basis for Tshitangano’s claims of racist conduct at the power utility.

In his report, Semenya stated that Tshitangano denied that he accused De Ruyter of racism during a later hearing.

“This retraction by the CPO is startling,” Semenya said in his report. “The allegations could potentially harm Eskom’s financial status.”

Eskom welcomed Semenya’s findings and accepted his report in its entirety.

“Use of the race card without foundation, merit or substance has no place at Eskom,” the company stated.

However, Tshitangano is not satisfied with Semenya’s report, claiming that the Eskom board didn’t ask the advocate to investigate several other serious issues.

City Press reported that Tshitangano wrote to the chairperson of the select committee on public accounts, Mkhuleko Hlengwa, and said the following issues were not included in Semenya’s report:

  • The hiring of law firm Bowmans when it was not on the appointed panel of law firms. Among others, Bowmans was hired to investigate the Econ Oil contract for which Tshitangano was dismissed after being found guilty of misconduct.
  • Crawford Forensics Services allegedly investigated irregularities relating to a Black & Veatch project management and engineering services contract, but Eskom has not yet released this report publicly.
  • The unequal treatment of suppliers. Tshitangano alleged that IDS Africa was able to change the prices it quoted and was awarded a three-year, R114 million contract despite not having the relevant experience.
  • The appointment of a general manager without complying with Eskom’s human resource policies to advertise the post.

MyBroadband contacted Eskom for comment, but the power utility did not respond by the time of publication.

In comments to the City Press, Eskom spokesperson Sikonathi Mantshantsha disputed that the Eskom board was going to fight the findings of either of the two advocates.

Mantshantsha said that the board accepted the reports of Cassim and Semenya unanimously and would not be challenging any matters they raised.

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Big fight over R8 billion oil contract at Eskom