Home South African Mineral Resources and Energy Department defends its emergency power procurement

Mineral Resources and Energy Department defends its emergency power procurement

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Mineral Resources Minister Gwede Mantashe said DNG Power had since requested a delay to its court challenge of the bid outcome pending the completion of the parliamentary inquiry process. File photo: Nhlanhla Phillips, ANA.

The Mineral Resources and Energy Department has defended the handling of the procurement of the 2 000 megawatts of emergency power, telling the parliamentary committee of mineral resources and energy that the process was above board.

The Mineral Resources and Energy Department has defended the handling of the procurement of the 2 000 megawatts of emergency power, telling the parliamentary committee of mineral resources and energy that the process was above board.

A total of 11 projects were appointed for the programme in the so-called emergency Risk Mitigation Independent Power Producer Procurement (RMIPPP).

However, DNG Power, a losing bidder, raised allegations of blatant corruption after Turkey’s Karpowership was named as the winning bidder for the bulk of the tender. The Karpowership application to operate the LNG to power vessels at three of the country’s ports was rejected after its environmental licence failed.

Mineral Resources Minister Gwede Mantashe said DNG Power had since requested a delay to its court challenge of the bid outcome pending the completion of the parliamentary inquiry process, lawmakers heard yesterday .

Mantashe said that DNG had retracted the court challenge and wanted to wait for Parliament in an effort to scuttle the process.

The portfolio committee on mineral resources and energy is set to establish an inquiry to test the allegations. Newly appointed head of the Independent Power Producers Office in the Department of Mineral Resources and Energy, Bernard Magoro, told the committee it was impossible to influence the bidding process.

“Not even myself can influence that process. There are so many checks and balances. even technical advisers work in isolation,” said Magoro.

He said the court hearing was scheduled for next Tuesday and DNG had requested a postponement of its it challenge to the end of November.

“The reasons cited are that the applicant wants the parliamentary inquiry to be concluded first. I am not sure why the parliamentary process was cited because it is a regulatory process,“ said Magoro.

He said the office had received 28 bids, 11 of which failed the first stage, 17 made it to stage two, which ranked the bidders based on price.

“If a bidder cannot demonstrate there is 49 percent shareholdership by South Africans, that bidder is immediately disqualified. Similarly, if a bidder does not meet the environmental or land use requirement they will not make it to the next stage.” He said the qualification stage was a “pass or fail“.

Magoro said the office expected the projects to reach financial close by the end of the month.

“There was the initial deadline for financial close of July 30. Unfortunately we were not ready on our side. In particular, Eskom has not finalised the programme agreement. Also Nersa (the National Energy Regulator of SA) was still busy with their generation licences,“ he said.

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