DA calls for review of Risk Mitigation IPP programme after DEAFF decision on Karpowership deal

Issued by Kevin Mileham MP – DA Shadow Minister of Mineral Resources and Energy
24 Jun 2021 in News

Please find attached soundbite by Kevin Mileham MP.

The announcement that the Department of Environmental Affairs, Forestry and Fisheries has decided not to grant Karpowerships a permit to operate in the Ports of Saldanha, Richards Bay and Coega is indicative of the lack of due diligence in the adjudication process of the initial Risk Mitigation Independent Power Producers Procurement Programme (RMIPPPP) award.

Despite repeated requests for information, it is unclear how the successful bidders were identified, what the scoring mechanism was, and who took the ultimate decision in the process. The DA submitted a motion to the Portfolio Committee on Mineral Resources and Energy calling for a comprehensive investigation into the bid adjudication process, but this was rejected by the ANC and EFF members of the committee on the misguided belief that “the committee has no mandate to conduct oversight over financial matters” (in contrast to the many times the committee has done exactly that). The committee instead suggested that the matter be referred to the Standing Committee on Public Accounts (SCOPA) – even though no financial transactions had taken place. Accordingly, the DA wrote to the chairperson of SCOPA, but has not received a reply to our request.

Among the issues raised with regard to the RMIPPPP were compliance with local content requirements, environmental permits, Transnet/National Ports Authority permits, and the affordability of certain solutions, given their reliance on foreign fuel suppliers and the rand/dollar exchange rate.

This latest development clearly shows that the Department of Mineral Resources and Energy were grossly negligent in the formulation, management and adjudication of the bid process. Minister Mantashe and his department have been obstructionist in providing information and had clear predetermined outcomes in mind when they issued the Request for Proposals.

It is past time that a thorough investigation into the bid process, and the role of the Minister and his senior officials be conducted. South Africa cannot afford another Medupi or Khusile scandal, and this has all the hallmarks of becoming one.

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