De Ruyter and Oberholzer allegedly broke Eskom tender policy

Former Eskom CEO Andre de Ruyter and former COO Jan Oberholzer allegedly supported a deviation from Eskom’s payment policy concerning a controversial R500 million security contract with Fidelity.

City Press reported that Eskom had launched an investigation to expose whistleblowers who revealed information about a controversial R500 million security contract awarded to Fidelity.

Fidelity was granted a three-month contract at the behest of Eskom’s former head of security, Karen Pillay. The utility has since suspended her.

The Association of Private Security Owners of South Africa (Tapsosa) initially alleged that Eskom flouted procurement processes in awarding an R500 million contract over three months to Fidelity.

They are demanding an inquiry into the tender processes Eskom followed. Tapsosa has escalated its demands to the relevant Parliamentary oversight committees and Electricity Minister Kgosientsho Ramokgopa.

The organisation called for people behind the contract, including Pillay, former CEO Andre de Ruyter, and former COO Jan Oberholzer, to be held accountable.

They also want an investigation into how the process took place and how an emergency procurement process was used to pick one provider – Fidelity Security Group.

Fidelity was handpicked for the contract as the tender was deemed an emergency and did not have to go through a transparent, competitive bidding process.

The contract covers Eskom generation units and their transmission infrastructure. It included land and air support with helicopter and tactical drone surveillance capabilities, specialised armoured personnel carriers, tactical intervention units, access and crowd control.

Eskom confirmed that the services were awarded in line with all its procurement procedures and the National Treasury directives for emergency services procurement.

Fidelity said it will cooperate with any inquiry into the contract and is confident that all due processes were followed.

Former Eskom COO Jan Oberholzer

City Press reported that Eskom insiders gave the publication access to a letter from Pillay to then Eskom CFO Calib Cassim, requesting permission to deviate from the utility’s payment policy and fast-track invoice payments to Fidelity amounting to more than R250 million.

Eskom’s payment policy states that any contract valued at R100 million or more will be paid in 60 days. Pillay requested the payments be made within 7 to 14 days.

The letter also shows that former Eskom COO Jan Oberholzer supported the deviation request by Pillay before Cassim approved it.

Former CEO Andre de Rutyer also supported the deviation from regular processes and supported Pillay’s initiation of the three-month emergency contract with Fidelity without inviting any other company to submit bids for the work.

Furthermore, Pillay’s initiation of the contract was based on the information compiled in the controversial George Fivaz investigation launched at the behest of De Ruyter with private funding.

Pillay is currently on suspension and being investigated for her alleged central role in preparing the scope of work that was tailor-made for Fidelity.

Eskom insiders told City Press that those who supported the payment deviations, including De Rutyer and Oberholzer, “engineered the Fidelity contract”.

 “Our executives babysat the Fidelity contract by making special requests for payment deviations for the company to be paid large sums of money outside the prescribed 60-day payment period.”

The same insiders believe the forensic investigation Eskom recently launched is an attempt to deflect attention from the ongoing Special Investigating Unit probe into Eskom’s executives.

“This is a witch-hunt against the people responsible for exposing the Fidelity contract. The focus shifted away from the people involved in the Fidelity contract to the people who saw the wrong that was happening,” an Eskom employee said.

“The executives who handled the Fidelity contract didn’t want anyone to know the details of how far they went to ensure that the company got preferential treatment. The investigation’s a cover-up.”