Eskom vindicated by court judgement on Econ Oil matter

Tuesday, 29 June 2021: Eskom is pleased to inform the public that it has this afternoon received further boost and has been vindicated in its fight to eliminate irregular and unlawful procurement practices in the organisation. In its judgement on the CORP 4786 contract, the South Gauteng High Court has reviewed and set aside the award of the October 2019 tender award, and awarded costs against Econ Oil & Energy, which had opposed Eskom’s application.

This is yet another successful attempt by the Board and management of Eskom in their endeavours to safeguard the public purse by setting aside irregular tender awards where prima facie evidence of unlawfulness exists. In setting aside the decision to award the tender, Judge Vally concurred with Eskom that the tender process was tainted by palpable irregularities.

“The managing and implementation of the tender was blemished by irregularity and illegality of a most fundamental kind, and could under no circumstances be rescued. Had the Board applied its mind properly to the matter it would have had no choice but to forsake the outcome of the negotiations….The only just and equitable pathway open to a court in a matter with so fundamental a breach of the law is to review and set aside the decision of the Board,” reads part of the judgement.

During October 2019 Eskom awarded CORP 4786, a R14 billion contract for the supply of fuel oil to three companies; Sasol Oil, FFS Refineries and Econ Oil & Energy. During January 2020 Eskom’s executive team became aware of evidence of irregularities and illegal collusion between some of its executives and Econ Oil.

This was after the Group Chief Executive, André de Ruyter, picked up that there were possible irregularities on the contract on his third day on the job. A forensic investigation was commissioned, which confirmed massive evidence of corruption and the manipulation of tender processes by both Eskom employees and the management of Econ Oil. Eskom initiated steps for a judicial review with a view to set aside the contract as null and void 

“This court judgement is a vindication of the Board’s and management’s unwavering stand to protect Eskom’s financial and operational interests from corrupt elements, thereby safeguarding the public purse,” said Eskom Group Chief Executive André de Ruyter. “At the beginning of 2020, when we assumed the mandate to lead this organisation, we pledged to investigate and set aside all contracts where evidence of corruption has been uncovered. We shall not waiver from that commitment to the people of South Africa, no matter the fightback.”

Statement issued by Eskom, 29 June 2021