Tussle over R800m contract

A trade union has accused Joburg City Power of giving an R800 million contract for solar water heater geysers to a company that imports the units even though they could be manufactured here. The National Union of Metalworkers of SA (Numsa) said that as a result hundreds of jobs in the metal industry have been placed at risk. The union has now lodged an application before the court asking it to compel City Power to give Numsa access to the records and documents relating to the awarding of the multimillion-rand contract to the multinational franchise Tasol Solar. It alleges the units are imported from China. The application is expected to be argued next week.

City Power has said it is ready to defend itself in court. This comes as Reserve Bank governor Gill Marcus expressed concern over the ailing economy. Marcus, in her monetary policy statement, referred particularly to the manufacturing industry, saying data indicated that mining production was increasing but output was contracting and “looking bleak”, manufacturing had declined, household consumption was low, retail sales had contracted month on month for March, and unsecured lending for households was still high. This all had contributed to her growth forecast for the economy while keeping the interest (repo) rate steady.

City Power – a municipal-owned electricity supply entity – plans to roll out more than 110 000 solar water heater geysers in Joburg households by 2015. Numsa alleges that “Tasol is importing the low pressure geysers from China”, putting local jobs at risk. This, they say, flies in the face of regional job creation. Numsa treasurer Mphumzi Maqungo told the Saturday Star this week that City Power had failed to prioritise local content when it awarded the contract. “Tasol is not manufacturing the low-pressure solar water heaters in South Africa. They are produced in China,” he said. “People benefiting out of our own taxpayers’ money are in China.”

He claimed that City Power had refused to disclose all information relating to how the contract was awarded and had instead handed the union “blank documents” when it requested them through an access-to-information application. “We are not casting aspersions on City Power but we want transparency. They have failed to share this information with us for the past 12 months,” he said. Maqungo said three local companies that manufacture similar solar water heaters were “overlooked”, further putting on hold prospects of job creation for local youth and the unemployed.

In its affidavit, Numsa argued that City Power had deliberately tried to frustrate it by claiming in its various correspondences that an investigation was not complete on the awarding of the contract. The head of the union’s legal department, Prudence Qgoba, said despite numerous requests and demands City Power had failed to give the union tender documents even after it embarked on a formal process. However, City Power has refuted the claim by Numsa that the utility refuses to disclose information to the union on how the contract for the supply and installation of low-pressure solar water geysers was awarded in May last year.

“Notwithstanding the fact that Numsa was not a bidder for the contract, City Power acceded to the request for information by Numsa within reason,” said City Power’s head of legal, Andrew Lishivha. “With regard to the information on the scores obtained by companies which bid for the tender, we are unable to accede to Numsa’s request as it consists of confidential information that relates to third parties.” Lishivha also dismissed as “completely untrue” the allegation that the solar water heaters were imported from overseas. He said in awarding the contract, the utility “complied fully with the requirements of local government, the municipal finance management act, supply chain management policy and Treasury circulars.

“It is also important to further indicate that the award of the contract is aligned to the City of Johannesburg’s growth and development strategy.” “Consequently, the issue of regional job creation and skills development was also a major consideration.” According to City Power, 45 companies responded to its tender, and the contract was allocated “fairly and equally” to 21 companies, two to manufacture and the others to install the solar geysers. The case by Numsa against City Power is set down for hearing in the Joburg High Court on Tuesday.