Eskom to continue working with ABB despite admission of irregular contract

Eskom CEO Andre de Ruyter said that Eskom paid substantially more for the contract with ABB than it should have.

FILE: Eskom CEO Andre de Ruyter at a briefing on 31 January 2020. Picture: Bonga Dlulane/EWN

JOHANNESBURG - Eskom said that it would continue to do business with Swiss company ABB despite the company’s admission that its contract with the utility was irregular.

Earlier on Friday, the Special Investigation Unit (SIU) announced that R1.56 billion would be paid back to Eskom from the deal to provide the power utility with controls and instrumentation for the Kusile power station.

The SIU said that the executives in charge when the contract was entered into had since left Eskom.

Brian Molefe was the CEO and Matshela Koko was the head of generation.

Eskom CEO Andre de Ruyter said that Eskom paid substantially more for the contract with ABB than it should have.

"This was R324 million more than the price offered by the lowest bidder. At the time, it was motivated to award the contract to ABB on the basis that ABB could offer a scheduled acceleration."

But he said that it did not make business sense to cut all ties with the company.

"The challenge that we now have, of course, is that Kusile is an ongoing project, the work on this power station, in terms of control and instrumentation project is about 90% complete and for Eskom to now approach the market and appoint a new contractor, with different technology, will probably cause us to incur a delay in the commissioning of Kusile."

The SIU said that a criminal investigation into the matter was under way and two people had been arrested.

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