Institute slams ANC/Hitachi flak

The Institute of Directors on Friday questioned "unsubstantiated widespread criticism" of Eskom and the decision to award a tender to a company in which the ANC holds a 25% share.

"The decision made by the Eskom board - a board appointed not by the ANC but by government as main shareholder in Eskom - should be respected as being a product of due process and having been made in the best interests of Eskom, not the ANC or anyone else," a statement from the institute's CEO, Lindie Engelbrecht read.

The institute brings together leaders in the private and public sectors and promotes sound corporate governance.

"We do agree that there may be a perceived conflict if any board members are closely linked with or connected to the ANC, and we can only assume that such a conflict was appropriately disclosed and managed.

"However, to automatically conclude that there was some form of preference during the board decision process is not reasonable and by implication calls into question the integrity of board members in fulfilling their fiduciary duties."

Opposition political parties said this week the ANC's investment arm, Chancellor House, is set to earn billions from a contract with the company Hitachi, to build power stations for Eskom in Limpopo and Mpumalanga.

Democratic Alliance MP Sejamothopo Motau said there are "compelling reasons" to believe that much of the money for building the stations will come from Eskom's proposed increase in electricity tariffs by 35% a year for three years.

"The array of information available now in the public domain provides compelling reasons to believe that the ANC will benefit from higher Eskom tariff hikes," he said in a statement.

ANC treasurer Mathews Phosa had promised to take steps to disinvest the party's interest in Hitachi, which makes products ranging from home appliances to industrial machinery.

However, ANC secretary-general Gwede Mantashe said this week there was nothing wrong with the party holding a stake in Hitachi.

The ANC has not commented further on the matter, despite requests to do so.

Motau said several documents were available publicly demonstrating the Hitachi tender was flawed.

"Last year, for instance, we released a confidential Eskom memo detailing how Hitachi's submission was relatively less applicable than the Alstom submission.

"Likewise, the Eskom letter leaked in 2008, entitled 'Summary of the Medupi Tender Process', demonstrates that the award of the R20bn Medupi boiler contract should have been granted to the Alstom-Steinmüller consortium, and not to the Hitachi consortium."

Eskom had ensured Hitachi no longer had to compete with other suppliers for tenders.

"As a consequence, for every coal power plant that is now constructed, Hitachi's shareholders, including the ANC, are ensured greater revenues," Motau said.

- Fin24.com