No+light+on+Eskom+Hitachi+tender,+Sibongile+Khumalo,+B+Report



=No light on Eskom's Hitachi tender=


 * Sibongile Khumalo, Business Report, 12 December 2007 (see also Business Watch, below)**

Johannesburg - Eskom succeeded only in muddying the waters yesterday rather than clearing its name in the controversy surrounding its issuing of a multibillion-rand contract to Hitachi Africa, a power equipment vendor that is 25 percent owned by Chancellor House, a company with strong ties to the ANC.

In a report outlining the tender process, Eskom said an independent review conducted by auditing firm Deloitte had highlighted the involvement of Chancellor House. "The [Deloitte] report concluded that there was no information that indicated that there was any political influence in this regard."

In an apparent contradiction of this statement, Tony Stott, a senior manager at Eskom, told Business Report: "A thorough audit conducted by a reputable audit company revealed no political links whatsoever. Our decision is not going to be influenced by media reports that link Hitachi with a company that has political links. There are no plans of reconsidering the tender."

Eskom's report acknowledges Chancellor House's involvement, but does not divulge who its shareholders are. The report fails to explain why the involvement of Chancellor House was raised if there was no political influence. It does not explain why political influence would have been investigated.

"The process was confirmed by Deloitte to be fair, transparent, equitable, cost effective and competitive and not biased towards any predetermined outcome," added Eskom in the tender process report.

Steven Friedman, a political analyst, criticised Eskom's handling of the matter, saying the power utility needed to do more than say it relied on Deloitte's report.

"This puts the credibility of Eskom into question if they say they did not see anything wrong with issuing such a big tender to a company that has ties with the ruling party," he said. "It is very irresponsible to ignore such a factor and Eskom owes the public an explanation."

The R20 billion contract, awarded last month, was for the construction of six 800 megawatt steam generators for the Medupi power station, which will be built at a cost of R78.6 billion. According to a Mail & Guardian report, Chancellor House stands to get a R3 billion cut from the tender.

Over the past few years the firm has clinched significant investments in the mining, engineering, information technology and energy sectors. Its largest deal yet has been the prospecting rights it was awarded by the department of minerals and energy to one of the world's largest untapped manganese fields in the Kalahari.


 * From: http://www.busrep.co.za/index.php?fArticleId=4169311**

=Contacts trump expertise in ANC's Medupi deal=


 * Business Watch, 12 December 2007**

Eskom, the state-owned power utility, may have given itself a clean bill of health for the way it gave an ANC front company access to billions of rands; and Deloitte, the audit firm, may have adjudged the tender process "fair, transparent … and competitive", but the decision stinks.

When Eskom awarded Hitachi and Chancellor House the contract to build boilers for the new Medupi power station, the ANC was effectively referee (because the government it dominates is the only shareholder in Eskom), player (because a company set up to fund it was a beneficiary of a multibillion-rand contract) and rule setter (because it decides on electricity policies and regulation).

It therefore does not matter who clears the process of wrongdoing and how they do so: there is no way the ANC, as the ruling party, should ever directly benefit from state-sponsored spending.

Even if Hitachi were the best supplier around (it wasn't but the original winner couldn't fulfil certain conditions), Chancellor House should have been axed as its empowerment partner and others should have been found to participate in the deal.

There must be many black-owned companies with large-scale construction and utility experience that could bring more to the table than a bristling contact book.

But perhaps, as the cynics aver, contacts trump expertise after all.


 * From: http://www.busrep.co.za/index.php?fArticleId=4169280&fSectionId=554&fSetId=662**

649 words