Eskom mass action threat over R500 million Andre de Ruyter security tender

The African Security Congress (ASC) is threatening Eskom with “an aggressive programme of action” after the power utility awarded a R500-million tender to the Fidelity Security Group.

During former Eskom CEO Andre de Ruyter’s tenure, the utility spent R500 million over three months for security services from Fidelity following a closed tender process.

De Ruyter is accused of flouting normal tender processes to approve the deal under the guise of emergency services procurement.

Following emergency procurement processes, there was no requirement to have an open and competitive tender process. A single company, Fidelity, was allegedly hand-picked.

Eskom said the Fidelity Services security contract was in line with its procurement procedure and the National Treasury directives for emergency procurement of services.

“The placement of the security contract was necessitated by information received by management indicating that there was a potentially serious security risk to Eskom’s operations and assets,” it said.

The contract was established from July 2022 to September 2022 with an estimated budget of R500 million.

It was placed under emergency procurement to avert potential threats and to safeguard critical sites at Eskom.

The scope of the contract mainly focused on critical power stations, strategic corporate sites, and the transmission network.

Eskom said it is aware of the publications of unverified messages and claims of corruption and fraud linked to the R500 million contract.

“Given the seriousness of such allegations, Eskom will work with the relevant authorities on any investigation,” it said.

ASC president Tebogo Motloung is not satisfied with Eskom’s response and is threatening mass action against the power utility related to the contract.

Motloung told ENCA they engaged with Eskom through The Association of Private Security Owners of South Africa (Tapsosa) but did get satisfactory answers.

Tapsosa said it sought transparency and clarity on what services were procured, the procurement process, and why this particular company was chosen.

To this end, the association wrote to De Ruyter when he was CEO at Eskom and the utility’s COO, Jan Oberholzer.

When it was met with silence, Tapsosa escalated its demand for transparency to the National Treasury.

Tapsosa met with the Treasury, who said Eskom did nothing wrong in using emergency procurement processes as the PFMA outlines cases in which normal procurement processes can be ignored.

It alleged that the emergency tender was initiated to follow up on De Ruyter’s intelligence report conducted by George Fivaz Forensic and Risk and funded by Business Leadership South Africa (BLSA).

Tapsosa said it would escalate its demands to the relevant Parliamentary oversight committees and the Electricity Minister, Kgosientsho Ramokgopa.

“We want answers about the Fidelity Security Group contract. If answers are not forthcoming, heads must start to roll at Eskom,” Motloung said.

Motloung further called for the immediate suspension of Eskom’s head of security Karen Pillay and former COO Jan Oberholzer pending the investigation.

He argued that Pillay and Oberholzer could not be under investigation and still working at Eskom as it can influence the outcome.

“We are going to pursue a criminal case against them. Nobody should be in a position to award such a contract unquestioned,” he said.

Unless the issue is resolved, the African Security Congress is threatening “mass mobilisation and shutting down Eskom”.

Motloung said it would start with a march to Megawatt Park in Johannesburg on Tuesday to hand over a memorandum. “It will give Eskom 7 to 14 days to answer our grievances,” he said.

“If they fail to answer our grievances, we will lead a march which will shut down Eskom’s Megawatt Park until we receive answers.”