Court: Eskom tender to Kwanda fatally flawed

A R29-million tender awarded by Eskom to Kwanda Ferro-Alloy African Resources for the collection and disposal of non-ferrous scrap metals was fatally flawed, the Supreme Court of Appeal (SCA) held on Friday.

The SCA confirmed a decision by the Johannesburg High Court, which set aside the tender.

The Bloemfontein court also found that the tender was reviewable and liable to be set aside.

It held that the Eskom committees that had evaluated tenders had committed an irregularity by taking into account the financial ability of Kwanda’s holding company, Rappa Holdings, to perform the contract, and not that of Kwanda itself.

A panel of five judges unanimously pointed out that it was clear from Kwanda’s tender that the company did not have the resources to perform the contract and that there was nothing to show that Rappa, who had a 50% share in Kwanda, was under any obligation to finance Kwanda.

The court found the award of the tender to Kwanda was not rationally connected to the information before Eskom, and Eskom’s appeal to the SCA was dismissed.

Eskom in March 2007, by way of a request for quotation, formally invited tenders for the collection and disposal of non-ferrous scrap material.

The request provided that if a tender was accepted, a contract would come into existence for two years for the removal, as and when required by Eskom, of material from various sites in South Africa.

The initial application for a review of the tender was launched by the New Reclamation Group, which also tendered for the Eskom contract.—Sapa