DATE: 12 JUNE 2019
The B-BBEE Commission has found that Eskom Holdings SOC Limited failed to comply with section 10 (1) (b) of the B-BBEE Act when it awarded the tender (RFQ CORP 3571) for Duvha Power Station to a Chinese owned entity that did not meet the B-BBEE requirements, and has recommended to Eskom Holdings SOC Limited to cancel the contract and to conduct an independent audit of all its contracts above R1 billion from 2014 to check compliance with B-BBEE requirements.
B-BBEE Commission conducted the investigation pursuant to an anonymous complaint alleging that the procurement process for the boiler at Duvha Power Station (RFP CORP 3571) by Eskom Holdings SOC Limited did not comply with the requirements of the B-BBEE Act, and that the tender has been awarded to Dongfang Electric Corporation Limited, a Chinese company that does not comply with the B-BBEE requirements in South Africa. Upon investigation, it was found that Eskom Holdings SOC Limited failed to comply with section 10 (1) (b) of the B-BBEE Act and its own procurement policies in awarding of the tender to Dongfang Electric Corporation Limited, an entity with 0% black ownership when the tender required at least B-BBEE Level 4.
According to the B-BBEE Commission “the B-BBEE Act was amended in 2013 specifically to make it mandatory in section 10 for organs of state and public entities to implement the B-BBEE Act, and not only when they choose to. Therefore, in addition to the recommended cancellation of the contract and the independent audit by Eskom Holdings SOC Limited, we recommended investigations in respect of officials that were involved in this tender process so that decisive action can be taken to prevent this in future. Of concern also is the possibility that this tender process may have been deliberately compromised to favour a specific entity despite the set requirements in the tender document.” Eskom Holdings SOC Limited has cooperated and agreed to implement the recommendations of the B-BBEE Commission.
“We have since referred the findings in this matter to the Minister of Public Enterprises and the National Treasury for further consideration in line with the recommendations. The success of the B-BBEE Act also depends on the state entities implementing it properly and consistently, and this must be carefully monitored.” concludes the B-BBEE Commission.
The summary of the findings and recommendations of the B-BBEE Commission can be found on www.bbbeecommission.co.za/rulings/
Issued for the B-BBEE Commission:
Sidwell Medupe – Departmental Spokesperson
Department of Trade and Industry
Tel: +27 12 394 1650
Mobile: +27 79 492 1774
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