Siemens loses bid to halt power contract

The South African unit of Siemens has lost its bid to interdict power utility Eskom from awarding a contract to American multinational firm General Electric (GE). A Business Day report says the tender relates to the construction of a new transmission power system control and monitoring system. Eskom divided the contract into a part for the provision and maintenance of a software system, and for the provision and maintenance of front and rear projection systems. The other bidder was Hitachi. The contested tender is the one for the provision and maintenance of a software system, as Eskom did not award a contract for the second leg of the tender. Eskom told Siemens that its bid failed because it lacked supporting documents. Siemens asked the Gauteng High Court (Johannesburg) to stop the contract being awarded to GE, arguing that the power utility had allowed GE to enjoy an advantage over other bidders. It said this was because GE was the provider of the existing system and thereby secured knowledge and access that placed it at an advantage to it and Hitachi. It also alleged that the tender was invalid because the validity period was unlawfully extended.

Judge David Unterhalter dismissed all review grounds put forward by Siemens. The Business Day report says Unterhalter accepted Eskom’s argument that Siemens’ tender did not meet the overall technical scoring threshold. He also found that the accusation that GE enjoyed an advantage over other bidders was without merit. ‘GE’s engagements with Eskom in respect of the existing system were limited. Eskom sets out the basis upon which all bidders were given the same information, and bidders were not given access to Eskom’s generation information system. Eskom, in its answering affidavit, sets out the exposure GE had to this system,’ reads the judgment handed down last week. ‘On this version, I cannot find that GE enjoyed asymmetric access to information so as to skew the tender and give GE a material advantage. Nor is there sufficient evidence to warrant the conclusion that Eskom sought to assist GE to the detriment of other bidders.’ He added: ‘The assessment of the tenders is evidence before me. On that assessment, it appears that the bids succeeded or failed on their merits. And there is no showing that GE’s incumbency had any systemic causal impact upon the content of the tenders or their ultimate assessment.’