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EFF pressures Eskom CEO with lawyer's letter

Mar 11 2020 10:24
Khulekani Magubane and Lameez Omarjee
Eskom CEO Andre de Ruyter

Eskom CEO Andre de Ruyter (DEON RATH)

The Economic Freedom Fighters have demanded through their lawyers that Eskom CEO André de Ruyter not allow the state-owned entity to conduct business with any of the four suppliers that the CEO admitted to recommending as service providers for Eskom.

The letter from Ian Levitt Attorneys, dated 10 March, follows last week's meeting between Eskom's board and the Standing Committee on Public Accounts (Scopa). At the meeting De Ruyter was asked whether he had recommended companies to be appointed as suppliers at Eskom.

During the meeting, EFF MP Mbuyiseni Ndlozi pressed De Ruyter regarding companies that were given contracts at the parastatal at his behest.

De Ruyter confirmed he had facilitated business between Eskom and service providers on occasion, but said this was not improper, and took exception to Ndlozi's accusations that his conduct was corrupt.

The Eskom delegation at last week's meeting told Scopa that the utility was working to clear up its procurement systems, which had numerous challenges that left the business rife with non-compliance.

The Eskom delegation said many other cases were under investigation because companies continue to approach Eskom seeking modifications to the contracts and extensions to the durations of those contracts.

According to the EFF's letter, De Ruyter recommended four companies, one of which is Praga Technical, meant to help Eskom with the "Artificial Intelligence capability" that could predict damages to boilers.

Boiler tube leaks have been responsible for plant breakdowns, that led to load shedding. Normally Eskom had an early detection system in place to proactively find the leaks, and then fix them. But the contract for the system responsible for the early detection had lapsed and Eskom had put out a tender to replace it, Fin24 previously reported.

The EFF believes that De Ruyter's recommendations are in "direct violation of the requirements" of the Public Finance Management Act (PFMA) as it obliges state owned companies to "subject contractors to an open, transparent and comparative bidding process."

"Without such a process, no company should obtain preferential treatment no matter the proximity and access its managers enjoy with the CEO or leadership at Eskom," the letter read.

"This therefore serves as a demand for your written commitment that these four companies or any other company will not get preferential treatment by yourself or Eskom," the letter read.

The EFF wants de Ruyter to make a "written commitment" that he would not conduct any business without regarding the requirement of the law.

"This therefore serves as a demand for your written commitment that these four companies or any other company will not get preferential treatment by yourself or Eskom," the letter read. No deadline was given for De Ruyter's response.

Eskom spokesperson Sikonatha Mantshantsha told Fin24 by phone that there is no question that Eskom should abide by the PFMA.

"No contract will be awarded by Eskom without making sure we apply the spirit and letter of the law in terms of procurement," he said. "There is absolutely no intention on the part of Eskom's management to deviate from that," he added.

Mantshantsha said Eskom is approached on a daily business by people offering potential solutions to its problems. But Eskom's policy is that tenders cannot be awarded without following a "rigorous and competitive" process as laid out in the PFMA.

"If anybody is aware of any corruption or dishonesty on the part of André de Ruyter and anyone else, they must approach the law enforcement agencies and lay charges of corruption and make sure that person is held accountable. Not even the CEO of Eskom is above the law," Mantshantsha said.

eskom  |  andre de ruyter  |  scopa
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