South African electricity utility Eskom said on Friday that it would sign a disputed R4.3-billion contract with Areva, of France, for the replacement of six steam generators at the Koeberg nuclear power station, in Cape Town.
However, the potential for legal action remained, with Westinghouse Electric Company, the losing bidder, obtaining an order in the Gauteng Local Division of the High Court on Friday obliging Eskom to supply it with documents outlining the basis for Eskom's procurement decision.
Eskom had five calendar days to hand over the documents and the order also outlined a mechanism for dealing with information that could be deemed either commercially sensitive or confidential.
Following a procurement process that started in 2011, Eskom announced in mid-August that the contract had been awarded to Areva. However, the contract was not immediately signed, owing to outstanding commercial matters.
The contract related to the manufacture of six new steam generators, which Eskom planned to install at Koeberg in 2018, replacing the current generators, which were regarded to be out of date. The 2018 installation plan was also said to be aligned with maintenance activities planned for the facility.
But in late August, Westinghouse Electric Company moved to interdict the contract, alleging that the process had been compromised. The Toshiba Group company later withdrew the interdict application, but persisted with an application to secure all procurement documentation – a process that culminated in the September 5 court order.
Eskom acting group executive for technology and commercial Matshela Koko said at a briefing on Friday that, notwithstanding the order, the utility saw no impediment to signing the contract with Areva and that the contract would be signed over the weekend.
“We do have a court order, [but] we don’t have a court order to review the process. So, as Eskom, we are determined to replace the steam generators in 2018, because if we don’t we will have a nuclear risk that we will have to deal with.”
On Saturday, Areva confirmed that the contract had been signed than that it would design, manufacture and install the steam generators in Koeberg's two reactors. It said its technological solutions could
increase the plant’s power yield by 10%.
Koko insisted that Westinghouse Electric Company had never been identified as the preferred bidder throughout the process.
He also gave an assurance that there had been no discrepancies between the recommendation of a 25-person-strong technical team set up for the contract and the recommendations of the executive procurement committee and the board subcommittee, which made the final procurement decision.
Koko also dismissed the allegation that either acting CEO Collin Matjila or Public Enterprises Minister Lynne Brown had reversed the board subcommittee's decision in favour of Areva. He also maintained that the board subcommittee had been obliged to gain the concurrence of the Minister for the contract in line with Public Finance Management Act stipulations.
“We are confident that we have run a commercial process that is fair, that is transparent , that is equitable and that is cost effective,” Koko said.
However, Westinghouse Electric Company indicated that the disclosure of all relevant documentation relating to the tender would place it in "a strong position to proceed with its intended course of action to review Eskom's decision”.