Business Day

Safe for us to get tender — Westinghou­se

- FRANNY RABKIN Law and Constituti­on Writer

NUCLEAR power company Westinghou­se, which has contested a R5bn Eskom tender given to rival Areva, has disputed claims that re-awarding the contract to it would cause safety problems.

It slated Eskom’s argument as alarmist and untrue that disturbing the contentiou­s contract to replace steam generators at Koeberg power station would be unsafe.

In December, the Supreme Court of Appeal set aside the tender as unlawful, but Eskom and Areva have appealed to the Constituti­onal Court, citing safety concerns should there be a significan­t delay to the building programme.

The Supreme Court of Appeal said the award of the tender to Areva — due to “strategic considerat­ions” that were not included in the original bid documents — was unlawful. It set aside the award, but left it up to Eskom to take another look at the decision again, saying if it believed the strategic considerat­ions were vital, it could begin afresh and include them when considerin­g the tender.

Areva and Eskom want the Constituti­onal Court to overturn the appeal court’s decision. But they have also argued that, even if the Constituti­onal Court agrees that the tender award was irregular, Areva should be allowed to keep the tender.

Westinghou­se is defending the Supreme Court of Appeal’s decision, but has asked the Constituti­onal Court in a cross appeal immediatel­y to award the tender to it.

Eskom, supported by Areva, said the current generators were “fast approachin­g the end of their lifespan” and it was a matter of safety that the generators be replaced by 2018. But Westinghou­se has strongly disputed this “alarmist picture” and has asked the highest court to allow it to present new evidence to show that the replacemen­t generators could be installed safely in 2021. It also contended that Areva would not make the 2018 deadline.

In legal arguments filed yesterday, Westinghou­se counsel Jeremy Gauntlett SC said the new evidence Westinghou­se wanted to introduce showed that “to Eskom’s credit”, the existing generators had been maintained in good condition.

This had been confirmed by Eskom’s own safety-analysis report, he said.

He said that a report from Eskom’s technical experts supported the argument that the generators could be installed in 2021. Mr Gauntlett said that although

Areva had started on the work, it was behind schedule and would not make the 2018 deadline.

Instead, Eskom has had to accommodat­e Areva’s delay, at “considerab­le cost”, estimated at between R500m and R1bn, said Mr Gauntlett.

The suggestion that the 2018 deadline was immutable was untrue, he said. The Constituti­onal Court may hear new evidence, but only in exceptiona­l circumstan­ces. Areva has disputed the evidence Westinghou­se wants to bring forward and argued against the court allowing it in.

Mr Gauntlett said the highest court was in as good a position to make the decision as to who should get the tender as Eskom’s bid tender committee, which was also not a body of specialist­s.

He said that if Eskom were to go through the tender process again, excluding the strategic considerat­ions as they ought to have done, then “the only possible decision” would be to award the work to Westinghou­se. The outcome was, therefore, a foregone conclusion.

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