Eskom has given notice that it intends applying for leave to appeal a Gauteng High Court judgment setting aside a decision by the utility to exclude Babcock Ntuthuko Engineering from boiler maintenance contracts at 15 coal power stations, as well as an order that Eskom should conclude a fresh tender process within six months.

The contracts, which were awarded in October 2021 to Actom and Steinmuller Africa, are said to be valued at R16.3-billion.

Babcock, meanwhile, was disqualified by Eskom for failing to submit an ISO 3834 welding certificate, which the utility described as a “mandatory returnable for evaluation”.

In his November 17 judgment, Judge Anthony Millar found the disqualification of Babcock, which had been performing boiler repair and maintenance services at various Eskom power stations since 2003, to be irrational and unlawful.

Millar described the tender documentation issued in 2018 as having been poorly drafted and ambiguous in using the words certificate and certification as synonyms.

Given this ambiguity, and the fact that Babcock had made reference to its ISO 3834 certification in a tender covering letter, the judge ruled that Eskom should have afforded Babcock the opportunity to comply by submitting the certificate in question.

Eskom’s failure to do so, was “procedurally unfair” and made the disqualification of Babcock from consideration in the award “both unlawful and irrational”.

Millar ordered Eskom to conduct a fresh tender process and for an award to be made within six months.

In the meantime, the order declaring the contracts unlawful would be suspended “pending the finalisation of the fresh tender process”.

In its notice of application for leave to appeal, Eskom contends that the judge erred in describing the ISO 3834 precondition as ambiguous, arguing that the tender made it plain that the certificate should be submitted; a requirement that Eskom claims all bidders understood.

Babcock, Eskom asserts, also understood the requirement and “admitted” in a letter to Eskom that copies of the ISO 3834 certificates may have been excluded “in error” from its bid submission.

Eskom adds that, even if the precondition was ambiguous, the ambiguity was removed during a tender clarification meeting held ahead of the submission date.

Eskom argues that the court, therefore, erred in concluding that the ISO precondition was ambiguous, that the tender process was procedurally unfair, and that the award was reviewable.

Noting that the original tender process had taken three years to conclude, Eskom also argues that the court erred in ordering that the utility conclude a new tender process within six months.