Report claims of energy corruption, says Mabuza
Allegations of corruption in the government’s conclusion of a 20-year electricity supply deal with Turkish-owned Karpowership SA should be reported to the law-enforcement authorities so that they can be investigated, deputy president David Mabuza told MPs in parliament on Wednesday.
According to the Council for Scientific and Industrial Research (CSIR), this deal could cost R218bn.
Under the Karpowership deal, huge power ships will be moored in three SA harbours for 20 years.
Mabuza was answering questions from MPs in the National Assembly.
He was asked about the Karpowership deal by DA MP Kevin Mileham, who said there were allegations that politically connected individuals had benefited from the process, and that senior officials of the department of mineral resources & energy had attempted to manipulate the process of identifying successful bidders.
“There are also allegations that the request for proposals were drafted with a specific outcome in mind, and that the length of the contract is not a cost-effective solution to SA’s electricity crisis,” Mileham said.
The mineral resources & energy committee had rejected the DA’s request for it to investigate the deal.
DNG Energy CEO Aldworth Mbalati has also alleged that his company’s bid to provide 1,350MW of emergency power did not have a chance of succeeding because he was not willing to meet the demands — understood to be a bribe — of a government official in the department.
Mbalati has taken the matter to court to stop the tender and have it reviewed.
Mineral resources & energy minister Gwede Mantashe and his department have indicated that they will oppose the court application.
“We must fight corruption wherever it emerges,” Mabuza said. “If these allegations are something that we can believe, we must take the necessary measures to [inform] the relevant institutions about these allegations.
“I am aware that in the process of procuring whatever in government there will always be allegations of corruption.
“We have got institutions that can probe these allegations. Let us not talk about it, let us go and report it. If corruption is detected, the law must take its course,” he said..
Mabuza said that the mineral resources & energy department had informed him that, based on weighted average unit costs of about R1.57 per kilowatt hour (kWh) for the Karpowership proposal, it is estimated that the additional 1,995MW capacity may result in an electricity tariff increase of 3%-5%.
The decision of the National Energy Regulator of SA was awaited in this regard.
“The 20-year commitment seeks, among other things, to ensure reasonable electricity unit costs while taking into account Eskom’s electricity supply constraints.
“The procurement of the supply will ensure that costs are covered while capacity is available to generate electricity when required,” Mabuza said.
Turning to the issue of land reform, Mabuza said that the government was engaged with a process of consultation on how to administer land under the custodianship of traditional leaders.
People living in rural areas under traditional leaders must be able to get title and enter into commercial land transactions. After consultation this proposal would be taken to the cabinet.