B-BBEE commission finds compliance irregularity in Eskom deal

Eskom failed to comply with the Broad-Based Black Economic Empowerment (B-BBEE) Act when it granted a tender for the Duvha power station in Mpumalanga, according to the B-BBEE Commission.

The commission has recommended that the state-owned power utility cancel the contract of the awarded tender. It also recommended that Eskom institute an independent audit of all of its contracts over R1-billion, going back to 2014, to check whether they comply with B-BBEE criteria. Another recommendation is that all officials involved in the awarding of the tender be investigated.

The commission announced on Wednesday that Eskom was in contravention of section 10 (1)(b) of the act when it awarded the tender to a Chinese company that did not meet B-BBEE requirements.

It said that the company which received the contract for a boiler at the power station, Dongfang Electric Corporation Limited, has 0% black ownership.

Section 10 requires all government and state entities to integrate B-BBEE requirements in awarding contracts, licenses, grants, incentives and concessions to entities that are B-BBEE compliant and the commission is tasked with ensuring this happens.

The act was amended in 2013 to make it mandatory for organs of state to implement section 10 “and not only when they choose to do so,” the statement from the commission reads.

“Of concern is the possibility that this tender process may have been deliberately compromised to favour a specific entity,” the commission said.

Eskom has agreed to implement the recommendations, according to the commission, and the findings of this investigation have been referred to the minister of public enterprises and the director-general of the national treasury. 

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