Eskom defends Koeberg tender, lashes out at Westinghouse | Fin24
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Eskom defends Koeberg tender, lashes out at Westinghouse

May 29 2016 12:53

Cape Town - Eskom on Saturday defended its award of the contract for the replacement of six steam generators at Koeberg power station, saying Westinghouse’s complaints that the strategic considerations were introduced in the middle of the tender, to favour Areva, were unfounded.

"(Our) position that the strategic considerations were part and parcel of the tender evaluation criteria has never changed.

"This position is coupled with the contention that while Westinghouse’s price offering was cheaper, it was never, at any stage, an outright winner of the steam generator replacement tender," said Matshela Koko, Eskom’s Group Executive for Generation.

Koko was replying to an article by EE Publishers' Aimee Clarke: Eskom – changing the goalposts and rules of the game at half-time?, which was republished by several other publishers, including Fin24.

The article relates to the three-tier court battle between Eskom, Areva and Westinghouse over Eskom's award of a R5bn tender to Areva in August 2014.

The matter is now before the Constitutional Court, where Westinghouse on May 18 2016 argued that Eskom was not entitled to take these new considerations into account, and that it should be substituted for Areva as the successful tenderer.

READ: Eskom – changing the goalposts and rules of the game at half-time?

Eskom said its Board Tender Committee was given two alternative recommendations by its executive Tender Committee, one in favour of each bidder. "Ultimately, having considered all the information made available to it, the BTC awarded the tender to Areva."

Westinghouse opposed the contract award, first unsuccessfully in the High Court, and then successfully at the Supreme Court of Appeal, which ruled that the contract be set aside and sent back to Eskom to start the procurement process again from scratch – but this time lawfully, Clarke wrote.

The SCA judgment stated that an Eskom tender must “speak for itself” – bashing Eskom’s and Areva’s claims that the strategic considerations were “implied” in the tender document.

Neither Eskom, Areva nor Westinghouse were satisfied with the outcome of the SCA judgment, and all three parties applied to the ConCourt for leave to appeal (see background article here).

In his reply on Saturday, Koko said when the matter was argued before the High Court, Eskom took the Court through the tender evaluation criteria and demonstrated that the strategic considerations were always included therein. Hence Westinghouse’s review application was dismissed with costs.

He said when Westinghouse appealed against that judgment to the SCA, Eskom once again demonstrated the inclusion of the strategic considerations in the tender evaluation criteria. "For whatever reason, and despite all the empirical and unchallenged evidence made available to it, the SCA rejected Eskom’s argument and held that the strategic considerations vitiated the entire tender.

"However, the SCA refused to substitute Westinghouse for Areva as it accepted Eskom’s argument that it was not a foregone conclusion that, if remitted for reconsideration, the tender would be awarded to Westinghouse.

"Furthermore, the SCA did not know how much work had already been done, while, at the same time the 2018 deadline, which was one of the main gatekeepers for this award, was looming," Koko explained.

On Eskom's appeal to the Constitutional Court against the SCA judgment, Koko said the state utility once again took the ConCourt through the entire tender process and the fact that both Westinghouse and Areva were treated equally and fairly, also in relation to the strategic considerations, which were "always part and parcel of the tender evaluation criteria".

"This includes the change from a Lots based to a composite offer based tender, the bidders’ unreserved acceptance of and participation in the parallel negotiations, questions posed to them and the refusal by Westinghouse to disclose available float in its schedule, when Areva, on the other hand, was willing to disclose such critical information."

Eskom also explained to the ConCourt that Westinghouse had clearly admitted that it would not be able to meet the 2018 deadline, Koko said.

He said while Eskom does not wish to speculate on the possible outcome of the ConCourt ruling, the electricity provider "unashamedly maintains its view that, taking all relevant factors into account, including in particular, its nuclear safety culture, it appointed a bidder which had demonstrated overall value to Eskom and the country and that this was and still remains in the public interest".

areva  |  eskom


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