Eskom was entitled to axe Econ Oil – watchdog

The drawn-out fight between black-owned Econ Oil & Energy and state-owned power producer Eskom has taken a new twist after the Competition Tribunal on Friday dismissed an application for interim relief brought by Econ Oil.

Econ Oil & Energy and its owner Nothemba Mlonzi asked the competition watchdog to stop Eskom from terminating the lucrative fuel contract it had with it.

Mlonzi’s company had supplied Eskom with fuel oil since 2003. However, in 2018 Eskom investigated allegations of improper and unethical conduct against Econ Oil and following the probe, it terminated the supply agreement in place between it and Econ Oil and de-registered Econ Oil as a supplier to Eskom for a period of 10 years.

Mlonzi took umbrage and approached the tribunal seeking an interim order to interdict and restrain Eskom from barring it to compete for tenders for the supply of fuel oil to its power stations.

The tribunal on Friday said Econ Oil had not made a prima facie case for the interim order it sought.

“The tribunal considered whether Econ Oil’s exclusion as a supplier to Eskom is prima facie evidence of a prohibited practice; i.e. an exclusionary act, where the anti-competitive effect of that act outweighs its technological, efficiency or other pro-competitive gain.

“The tribunal found no prima facie evidence of an exclusionary act in contravention of section 8(1)(c) of the Act,” the watchdog said.

“It is the tribunal’s view that the applicants have not demonstrated any anti-competitive effects from Eskom’s exclusion of Econ Oil as a supplier to Eskom. In addition, the tribunal cannot find that Eskom was not justified in de-registering Econ Oil as a supplier for its alleged involvement in improper and unethical business practices.”

Former Eskom CEO André de Ruyter in his book Truth to Power: My Three Years Inside Eskom claimed Econ Oil was part of four criminal cartels fleecing the power utility.

Mlonzi has disputed this.

When contacted by Sunday World yesterday, Mlonzi said she was shocked to hear about the judgment, citing that she has not received nor studied it yet.

“I haven’t received nor studied the judgment. I was shocked to hear about the judgment on Friday night. I will need to study it first once I received it, thereafter I will comment on the matter,” said Mlonzi.

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