Maano Water (Pty) Ltd v Eskom Holdings SOC Limited

Eskom issued Tender CORP 5542 in August 2021 for a five-year supply of sulphuric acid. After failed negotiations with the highest-ranked bidder due to a global spike in sulphur prices following the Ukraine conflict, Eskom entered negotiations with Maano Water (Pty) Ltd, the second-ranked bidder. A central dispute concerned the contract price adjustment (CPA) model: Maano proposed a dollar-based hybrid model to accommodate increased costs, which Eskom consistently rejected as exposing it to unacceptable financial and exchange-rate risk. By May 2022, Eskom considered negotiations to have reached an impasse and, following internal procurement processes, cancelled the tender in August 2022 and resolved to reissue it. Maano launched an urgent application seeking to compel Eskom to resume negotiations or to review and set aside the tender cancellation. The High Court dismissed the application, and Maano appealed to the Supreme Court of Appeal.

The appeal was dismissed, and Maano Water (Pty) Ltd was ordered to pay the costs of the appeal.

The case reaffirms that the cancellation of a tender by an organ of state or state-owned enterprise prior to contract formation is generally an executive action, not administrative action under PAJA. It clarifies the limited scope for judicial review of procurement cancellations under the principle of legality, confirms rationality as the applicable standard, and underscores that tenderers have expectations rather than rights before contract conclusion. The judgment also provides important guidance on the non-enforceability of vague ‘negotiate to deadlock’ claims in public procurement contexts.