Eskom offered R800 million contingency fee from China’s Dongfang company - BD

A report by the Business Day newspaper on Monday states that Eskom offered to pay China’s Dongfang company an R800 million contingency fee on top of an amount of R4 billion it had quoted for a boiler at the Duvha power station in Mpumalanga.

On Friday the High Court in Johannesburg interdicted the contract after bidders Murray and Roberts and General Electric accused the parastatal of rigging the tender to favor of Dongfang.

Business Day journalist, Stephan Hofstatter has more on the story.

The reason for that particular contractor winning the bid was because it had a fixed cost even though its cost was R1 billion more than the rival bid, the question is why should you add a contingency fee onto a fixed cost?

Stephan Hofstatter, Business Day journalist

A question apparently asked by some of the executives, says Hoffstatter.

It just looks as though the numbers were constantly being massaged and manipulated to ensure that that particular contractor won the tender, being Dongfang.

Stephan Hofstatter, Business Day journalist

It will then go to court for the actual merits of the case to be heard. Eskom has not commented in any detail other than what they said in their court papers, and in essence, it's to say they at a higher risk...

Stephan Hofstatter, Business Day journalist

Click on the link below to listen to the full audio...


This article first appeared on 702 : Eskom offered R800 million contingency fee from China’s Dongfang company - BD


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