Business organisation Sakeliga has instructed its legal team to evaluate a recommendation by the Broad-Based Black Economic Empowerment (BBBEE) Commission that State-owned power utility Eskom cancel a R4-billion contract awarded to Dongfang Electric Corporation.
The commission on Wednesday said Eskom had failed to comply with the BBBEE Act by awarding a boiler tender for the Duvha power station to Dongfang, which has 0% black ownership, while the tender specified Level 4 BBBEE compliance.
Sakeliga said it would evaluate the commission’s decision and assess the larger implications and any bearing it might have on pending litigation by Sakeliga.
Sakeliga was engaged in litigation with the Department of Public Enterprises to have regulations that allow race-based pre-disqualification of prospective contractors set aside.
The regulations, adopted in 2017, allowed State-owned enterprises such as Eskom to set their own discretionary and arbitrary minimum black economic empowerment requirements for contractors wanting to do business with State entities.
Sakeliga said that if a prospective contractor was not 51% black-owned, Eskom would frequently pre-emptively disqualify it, without considering the proposals.
“It is a practice that precludes, at a critical time for the economy, electricity consumers in South Africa from the full range of cost-effective expertise available on the market.
“Ultimately, consumers and taxpayers lose, because the wrong benchmark was applied. Tenders should be about value for money for consumers, not about the race of a contractor’s shareholders or the ability of a contractor to get special treatment,” said Sakeliga CEO Piet le Roux.