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Chinese firm banned for fraud enters Eskom nuclear race

Feb 06 2017 07:29
Matthew le Cordeur

Cape Town – A Chinese company that has expressed interest in responding to Eskom’s nuclear request for information (RFI) was debarred for 18 months by the World Bank in late 2015.

The firm, Shandong Taikai Power Engineering (known as TKPE), was debarred by the World Bank “following the company’s involvement in fraudulent practices relating to the World Bank-financed electricity sector development project in Uganda and second transmission and distribution project in Vietnam”, the World Bank said on 19 August 2015.

An investigation by the World Bank found that the company misrepresented its prior project experience by submitting falsified contracts and completion certificates, along with a forged business license while bidding for contracts, the World Bank said.

The ban means TKPE has not been able to work on any World Bank funded projects since the announcement. However, the 18-month ban will be over by 19 February 2017, in a few weeks' time. That would mean there would be no clash of conflict should the World Bank and TKPE both participate in the programme. 

TKPE said it has exported high-volt power transmission and transformation equipment to over 60 countries around the world and has a strong capability in turn key contracts. It boasts completing projects in Zimbabwe, Gabon, Tanzania, Nigeria and Uganda.

"As a rising star in field of international engineering construction, TKPE will keep adhering to the enterprise spirit of 'honest, trustworthy, pragmatic and innovative'," it states on its website.

Eskom started the nuclear procurement process in December when it launched the RFI process, and two requests for proposals (RFPs) are due to be released this year. However, Eskom requires Treasury sign-off before this can be released, as it relates to the financial aspects of the bid.

Responding to Fin24’s query regarding TKPE, Eskom said “the RFI process is not competitive and will not exclude anyone from replying to the potential RFP”.

“If one of the companies submitting information is known (found) to be of dubious standing then it will clearly impact the weight given to any information they supply,” an Eskom spokesperson said on Friday.

“When we do an RFP process the vetting of the potential bidders will be in line with Eskom’s standard commercial rules.”

Eskom provides full list of companies that responded

On Thursday, Eskom provided Fin24 with the full list of companies that plan on responding to Eskom’s RFI by 28 April 2017. A total of 38 companies will likely respond to the RFI the list reveals, which is 11 companies more than Eskom first announced on 1 February 2017. The likely reason for the addition is that these companies missed the 31 January deadline.

Apart from the four main nuclear reactor vendors from France (EDF), Russia (Rosatom), China (State Nuclear Power Technology Corporation) and South Korea (Kepco), there are 34 other companies that have expressed interest to take part in the information-gathering aspect of the programme.

These companies could win bids to construct buildings and transmission lines, build roads and install technology systems for example. Excluding the four main reactor vendors, there are seven companies from overseas and 27 companies from South Africa.

"Bidding companies’ responses were an overall acceptance of the programme and not meant for specific components," Eskom explained.

Apart from its main Chinese reactor vendor bidder, the country has two other companies planning on bidding: the Power Construction Corporation of China and the debarred company TKPE.

The full list of countries who responded to the first RFI deadline:

Main reactor vendors    

France: EDF
Russia: Rosatom
South Korea: Kepco
China: State Nuclear Power Technology Corporation

Additional companies from other countries    

China: Shandong Taikai Power Engineering
China: Power Construction Corporation of China
US: GSE Performance Solutions Inc
UK: REI Nuclear Europe Ltd
UK: Urenco Enrichment Company Ltd
Spain: Empresarios Agrupados International
India: SP Group India

South African companies:   

Impulse Nuclear (Pty) Ltd    
GCC Engineering    
Makhosonke Gumede (ZIM Project Engineering)    
Matuesz Co (Pty) Ltd    
Thulanda Consultants    
M.T. Dlomo Trading and Projects Pty Ltd    
Project Time & Cost Consultants CC    
Dichaba Africa (Pty) Ltd    
Louwill Lefa (Pty) Ltd    
Mawawa Engineers    
Lesedi Nuclear Services (Pty) Ltd    
Monsakgomo Construction and Projects    
Arup Pty Ltd    
Allied Fittings and Flanges South Africa    
Bigen Africa Consortium    
Zylec Investments (Pty) Ltd    
Klydon Pty Ltd    
TE Mkhatshwa Development (Pty) Ltd   
ID Industry Service and Plant Construction South Africa (Pty) Ltd    
Johnson Crane Hire (Pty) Ltd    
Tata Africa Steel Processors    
Turner and Townsend (Pty) Ltd    
Phunga Consulting Engineers    
SHE Trading, Gauteng    
Motheo Construction Group, Gauteng    
TUV Rheinland Inspection Services (Pty) Ltd    
African Engineers for Nuclear Consortium   

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eskom  |  nuclear deal  |  nuclear programme

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