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The National Union of Mineworkers (NUM) welcomes the ruling by the South Gauteng High Court to set aside the R8 Billion tender between Eskom and Econ Oil after the matter was argued on the 9th of June 2021. The court recently (29 June 2021) found that the contract was unlawful.

The contract entered into by Eskom and Econ oil in 2019 changed from R850 million to R8 billion. The contract was to supply Hendrina power station with fuel oil. The presiding officer judge Bashier Vally said the tender was tarnished by “irregularity and illegality” and that it also contravened public procurement policy.

This will go a long way in fighting corruption in state-owned entities and the private sector. These are the kind of deals that have crippled state-owned entities and facilitated a looting frenzy in the public sector and the collapse of service delivery. Eskom today has no sufficient financial capacity to sustain service to South African society as a result of such rot. As the NUM, we welcome the finding and determination of the court. 

Role of the board

We note that the judge also made pronouncements on the role of the board which we regard as an important character assessment and discretion by the judge. For instance, the judge said “Had the board applied its mind properly to the matter it would have had no choice but to forsake the outcome of the negotiations [with Econ oil and others]. Instead, it chose to adopt it. By doing it perpetuated the illegality and gave it legal effect”.

 "In this regard, as NUM we call for an investigation arising from this character assessment of the board by the judge for Eskom and law enforcement agencies to establish if any of the board members involved at the time had directly or indirectly benefitted from this unlawful and irregular deal. Anybody found on the wrong side should be held accountable and personally liable. We also call for the recoup of the money already paid by the utility to the contractors," said William Mabapa, NUM Acting General Secretary.

Blacklisting board members

The NUM holds the view that the board members who approved the irregular deal should take personal responsibility. In this regard calls for the blacklisting of the board members who were involved.

This means they should be barred from occupying any similar position anymore in any public utility as part of stopping the recycling of rotten elements within public service entities. We believe there is no way a competent board of Eskom could have not foreseen the discrepancy identified by the judge.

 Resignation with immediate effect

The NUM calls on board members or executive management who were involved in the processing of the approval of the Eskom – Econ contract to resign with immediate effect.

 The NUM supports all government efforts to fight all forms of corruption without due regard for any individual`s social standing in society. It is for this reason that the NUM welcomes the initiative by Eskom to review the Econ oil 2019 contract and the court finding thereto.

This is an important governance victory consistent with the ruling party`s commitment to cleanse the state of malfeasance and reclaim all the loot for better use in advancing service delivery and the democratic course.

Issued by The NUM