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Question NW3761 to the Minister of Public Enterprises

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08 January 2024 - NW3761

Profile picture: Pambo, Mr V

Pambo, Mr V to ask the Minister of Public Enterprises

Noting that The Petroleum Oil and Gas Corporation of South Africa (PetroSA) has the poorest Broad-Based Black Economic Empowerment scorecard of Level 9, which is non-compliant compared to all other state-owned enterprises, what are the reasons that Eskom continues to conduct business with PetroSA when Eskom can get a cheaper product from service providers other than PetroSA?

Reply:

According to the information received from Eskom:

Eskom follows an open, fair, transparent, and competitive procurement processes in sourcing its goods and services as prescribed by National Treasury Regulations, Eskom Procurement Policy and Procedure (32 – 1034), as well as the legislative requirements (PPPFA, BEE, NIPP, etc). These processes entail:

  • A robust selection process to appoint qualifying suppliers to provide goods and services using the following criteria: 1) Technical capability and capacity, 2) Quality and competitiveness, 3) BEE, and 4) Price.
  • Once the suppliers have been identified through this process, a ranking based on preference points (price and BEE) is used to select the highest-ranked supplier to be awarded a contract.

An open market tender process was followed to award PetroSA

  • The process described above was undertaken to award the current contracts for fuel supply where PetroSA was the highest ranked (BEE level 4 and competitive price = discount of wholesale price) at the point of award (2019).
  • This was submitted and approved by the delegated approval authority (DAA).
  • These contracts will expire in September 2024 and a similar process is currently underway to source suppliers to replace the existing contracts.

Concern over high price

  • At the time of the award, PetroSA offered the highest discount/litre compared to other bidders.

Detailed market analysis

  • Eskom conducts a market analysis for benchmarking purposes and scans the market for potential new entrants.
  • Eskom also monitors the market in search of opportunities for price renegotiations where possible.

 

Remarks: Approved / Not Approved

Ms Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date:

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