Government officials have rejected “an unacceptable” settlement proposal by DNG Power, the disgruntled bidder that is seeking to displace Turkish company Karpowership as a preferred bidder in the tender process to provide SA with emergency power.
The company has also made an application to the high court in Pretoria for the hearing of its case to be delayed.
The moves come as a surprise because DNG had made strong claims that officials had explicitly solicited bribes. DNG also told the court that the matter was urgent and had initially requested an interdict, which it later abandoned in exchange for an early court date. The department of mineral resources & energy and its Independent Power Producer (IPP) Office rejected the settlement offer and are opposing the delay.
The case was originally to be heard in August but was delayed to September and was due to begin in the high court in Pretoria next week. The details of the proposed settlement offer haven’t been disclosed.
DNG CEO Aldworth Mbalati confirmed the request for a delay. “This is to give effect to material evidence that will come out of the criminal investigation that is being undertaken by the Hawks on the matter,” he said in response to questions.
Mineral resources & energy minister Gwede Mantashe and head of the IPP Office Bernard Magoro appeared before parliament’s portfolio committee on Wednesday to brief it on the Risk Mitigation IPP Procurement Programme (RMIPPPP) bid process to procure emergency power to plug SA’s power gap. The lion’s share of the bid was won by Karpowership SA, a subsidiary of the Turkish company, which provides gas-powered electricity from floating barges.
The committee is set to investigate the process after several environmental organisations insisted the committee probe allegations of corruption.
‘Strange’
Magoro said he found the request for an extension “strange” as it occurred after all the papers had been filed.
“The reason given was that DNG wants the parliamentary inquiry to be completed first; wants the Nersa licensing process to conclude; and wants the police to investigate the allegations of corruption,” Magoro said, referring to the National Energy Regulator of SA.
“It is quite strange that we received this application after all the papers were filed. We also received an unusual letter for an application seeking a settlement, with very unacceptable conditions, which we rejected.”
Magoro and Mantashe have denied the allegations in the DNG affidavit, which include that Mantashe’s wife had facilitated a delay in the closing date of the bid to suit other bidders, and that top departmental officials had summoned it to a meeting at a Pretoria restaurant where they were asked for a bribe.
Mantashe told MPs that no such contact with bidders had been made by his wife.
He also stated that he had never met with Luvo Makasi, one of the facilitators of the meeting, and that he did not regard him as an associate.
Mbalati said the statements by the department amounted to a “specious smear”.
“The mineral resources & energy department should admit to what is now widely accepted — that there were corrupt manoeuvres behind the success of RMIPPPP bids.
“Evidence I have given to the Hawks demonstrate[s] that. The reason for seeking a postponement to the court proceedings I have initiated is so that the criminal evidence the police are now investigating can be laid before the court,” he said.
The Karpowership deal faces other headwinds after the department of environmental affairs, forestry & fisheries rejected all three of its applications for environmental approval. It is appealing.
The preferred bidders of the risk mitigation programme must reach financial close by September 30. Should any of the projects fail to do so they will not go ahead. Other unsuccessful bidders won’t be brought into the tender as there were no reserve bids in the process.
Magoro said the only option would be to launch another process or accelerate forthcoming procurements.
SA has a 5,000MW power gap, of which the risk mitigation programme aimed to fill 2,000MW.
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