After dropping a bidder over paperwork, the court orders Eskom to scrap an R16 billion tender

A court has ordered Eskom to cancel an R16 billion tender award for the maintenance of high-pressure boilers and pipes at its 15 coal-fired power plants after it disqualified one of the bidders unfairly.

The tender must be re-advertised within two months of the court order, and bidders must prepare their bids within two months. Eskom will have two months to evaluate the bids.

The North Gauteng High Court in Pretoria issued the ruling in response to an application by Babcock Ntuthuko Engineering, which was disqualified from the tender awarded in October 2021 due to a lack of an ISO3484 welding certificate. Babcock claimed that Eskom already had this certificate when the bid was adjudicated because it was required for previous contracts.

Actom and Steinmuller Africa were awarded the split tender instead. Between 2016 and 2021, the three companies worked together to service the 15 power plants, with Babcock in charge of four of them. These contracts were re-advertised in 2019 and awarded in October 2021 after being repeatedly renewed.

Judge Anthony Millar stated that “ambiguity” in the tender documents was at the root of the problem, which was not crystal clear “on the mandatory returnable documents” that should accompany bids. Eskom should have allowed Babcock to submit its ISO3484 welding certificate after the tender closed because its documents were ambiguous.

Says the judgment:

“Eskom’s failure to do so was procedurally unfair … and in consequence, the disqualification of Babcock from consideration in the award of the tender was both irrational and unlawful.”

Millar stated that there was no evidence that the bidders or tender pricing were tainted in any way. Eskom’s importance in “sustaining the very fabric and life of the Republic could not be overstated.” The court ordered Actom and Steinmuller to continue providing services to Eskom until a new tender was issued.