The Gauteng High Court has reviewed and set aside an Eskom decision to exclude Babcock Ntuthuko Engineering from contracts to maintain and repair boiler pressure parts and high-pressure pipework across 15 power stations. The contracts are valued at R16.3-billion.

The contracts were awarded in October 2021 to Actom and Steinmuller Africa, with Babcock disqualified by Eskom for failing to submit a welding certificate, which the utility described as a “mandatory returnable for evaluation”.

In his November 17 judgment, Judge Anthony Millar found the disqualification of Babcock, which had been performing boiler repair and maintenance services at various Eskom power stations since 2003, to be irrational and unlawful.

Millar said the tender documentation, which was issued in 2018, was poorly drafted and ambiguous in using the words certificate and certification as synonyms.

Given this ambiguity, and the fact that Babcock had made reference to its ISO 3834 certification in a tender covering letter, the judge ruled that Eskom should have afforded Babcock the opportunity to comply with the submission of the certificate in question.

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

The judge did not agree, however, with Babcock’s assertion that Eskom “improperly split” the contract between Actom and Steinmuller, noting Babcock’s own concession that, given the sheer volume work, it was always anticipated that the work would be divided amongst at least three bidders.

Millar ordered Eskom to conduct a fresh tender process within two months of the court order and for the closing date of the new tender to be no more than two months from the date of publication.

He also ordered that the tender be evaluated within two months of the closing date of the tender, that negotiations with the successful tenderers be concluded one month thereafter and that the award be made within a month of the conclusion of the negotiations.

In the meantime, the order declaring the contracts unlawful would be suspended “pending the finalisation of the fresh tender process”.