State-owned power Eskom on Friday confirmed in a statement that it had raised concerns with National Treasury about “areas” of the current procurement regulations, specifically mentioning waivers of certain evaluation criteria that would be required to facilitate the “proposed nuclear new build procurement (NNBP) process”.
Following media reports, the company said that, during its discussions with National Treasury’s chief procurement officer Schalk Human on March 28, it was true that it had pinpointed the evaluation criteria concerned.
These include gate 4 of the Standard Infrastructure Procurement and Delivery Manual (SIPDM), which "relates to budget and funding", and the extension of bid validity from 12 weeks to two years.
Further, the proposed waivers also include elements of localization and the requirement for self-designation under the Department of Trade and Industry’s local content regulations.
“The need for the waiver on the SIPDM gate 4 was to align the process with the Cabinet decision for the vendors’ responses to the request for proposals (RFP) to form the basis of the funding model that had to be submitted to Cabinet by the Department of Energy,” Eskom chief nuclear officer Dave Nicholls said in the statement in which he made specific reference to President Jacob Zuma’s 2016 annual end of year statement carried on The Presidency’s website.
In December, the power utility issued a request for information for the NNBP, which closes on April 28. It plans to issue a request for binding proposals, or RFP, from potential vendors by the end of June, provided it obtains the approvals to do so.
“Therefore, the finalisation of the budget and funding issues would not be possible prior to RFP issue,” said Nicholls in the statement explaining why SIPDM gate 4 was one of the evaluation criteria that would need to be considered in the waiving of "areas" of the "current National Treasury Regulations".
Opposition party, the Democratic Alliance, said it would oppose any exemption from the prescribed procurement standard in the nuclear acquisition process, as the “rushing” of the NNBP process was unacceptable.
It said Eskom would be embarking on the country’s single biggest public procurement – without fully assessing associated risks and consequences for South Africa’s economy.
“All State entities are bound by specific procurement standards and requirements. These processes are vital to ensure the effective, efficient and transparent acquisition of goods and services by the State and its entities. If procurement standards cannot be met – procurement should not start.
“It is difficult to imagine circumstances under which an exemption of this nature might be justified. Therefore, given the sheer magnitude of the implications of pushing ahead with the nuclear deal, it is essential that the public, as a key stakeholder, is made aware of it,” the party noted.
Another issue that was discussed between Eskom and National Treasury was the review of the feasibility study that is a requirement of SIPDM. “The SIPDM came into force on July 1, 2016, and predates the work done by Eskom on the feasibility of new nuclear power stations, as well as the gazetted Integrated Resources Plan of 2010.
“There was discussion of the need to confirm that the [feasibilit study] work done to date met the objective criteria of the requirements of the SIPDM,” Nicholls added.
“Eskom remains committed to conduct the NNBP in an open and transparent manner to the best interests of South Africa,” he said.
The DA said it remained strongly opposed to the nuclear deal and would continue to pursue all avenues to scrutinise every process involved, to ultimately put a stop to a deal that would “enslave future generations of South Africans.”