A falling out between partners in the controversial R100-million contract to do boiler tube maintenance at Eskom’s Medupi power station is threatening to scupper the entire project.
The Mail & Guardian has learned that a falling out between former Eskom chairperson Jabu Mabuza’s relative Nomvula Mabuza and her former partner Drazan Vrca has escalated to Eskom’s Megawatt Park headquarters, after Vrca complained to Eskom that Nomvula hijacked his company’s credentials — without authority — in order to win the lucrative contract.
The power utility declined to confirm this week whether Vrca had indeed complained or whether the three-year contract awarded last year had been terminated.
A spokesperson said: “Please note that the investigations [into the contract and IDS] are still ongoing.”
But three sources, including one with direct knowledge, confirmed the falling out, saying that Eskom should have terminated the contract by now.
“IDS Africa and international have a sour relationship,” said one source, while another said: “This guy [Vrca] had no idea about the first contract — it seems as if Nomvula played him because he thought they were bidding for the bigger maintenance contract.”
“Now it seems as if he wants Eskom to change the award and give it to his company because in terms of the requirements and expertise, that’s who won,” the source added.
Vrca did not reply to questions sent to him — in English, Croatian and German — via WhatsApp, despite answering a call and saying that he would respond.
IDS Africa, which had been formed in April 2018 after a new Eskom leadership with Jabu Mabuza at the helm was appointed, was also in line for 70% of an R11-billion boiler tube maintenance contract alongside General Electric. The contract was advertised within months of the company’s registration in 2018.
In previous communication with the M&G, Nomvula Mabuza claimed that IDS Africa had “47 years plant engineering experience” through a “licensed partnership” with an undisclosed partner. This, even though the company was formed in 2018 — a few months before the contract was advertised.
Mabuza this week said she was not aware of any fallout with Vrca, and that the partnership with IDS in Croatia and Germany. She also said Eskom had not alerted her to any complaint about her bid.
Eskom’s investigation into this contract, as well as the R11-billion boiler tube maintenance contract for which IDS Africa was shortlisted, will cover the procurement process followed plus whether Nomvula had declared her relation to Jabu — who chaired the board of directors at the time both bids were advertised in 2018.
Ordinarily, the potential conflict should have been picked up by Eskom’s officials doing probity checks and raised with both Mabuzas; it is unclear why this was not done.
Nomvula has previously declined to confirm whether she had declared the relationship, whereas Jabu — through his chief of staff and Eskom — has said he had no knowledge of Nomvula’s business dealings with the power utility.
When first asked about the relationship in January, Eskom said the fathers of the two Mabuzas shared the same great-grandfather, and that Jabu was not aware of Nomvula’s professional activities.
At the time, a source with knowledge of the Croatian IDS’s operations questioned why Vrca and Nomvula would need to register a separate company in South Africa, when IDS had already subcontracted on Eskom work. “It simply does not make sense to me because you would not need this complicated arrangement, which looks like fronting,” said the source at the time.
The M&G also reported that the contract had been brought to the attention of the Judicial Commission of Inquiry into Allegations of State Capture and to Public Enterprises Minister Pravin Gordhan in February and March last year, offering evidence against IDS Africa.
The M&G has previously reported how the contract price for Medupi was inflated by R10-million, after adjudication, to accommodate Nomvula, who had neglected to add zeroes in some pricing in her bid. The Eskom team that motivated for the increase had been sent by Eskom to negotiate a 5% price decrease with her. This anomaly drew criticism from two procurement specialists who worked in senior positions in state-owned companies of a similar size to Eskom.
“In my time with the financial problems Eskom is facing, I would have insisted that they stick to the original bid price if it didn’t constitute a risk. If it does constitute a risk, then I would want to know how it got past our own specialists because it’s low-balling,” said one specialist.
The other said: “It is quite clear that this is done to advantage the service provider [IDS Africa]. The PPPFA [Preferential Procurement Policy Framework Act] says that all procurement must be fair and transparent, and denying other bidders the opportunity to better their bids is not fair.”