Business Day

Report claims of energy corruption, says Mabuza

- Linda Ensor Parliament­ary Writer ensorl@businessli­ve.co.za

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.

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