‘THIS IS GRAND CORRUPTION’
A bribe was allegedly being offered even as the state capture commission was hearing evidence of corruption
123RF/mangsaab
One thing you must understand is that there is a “system in this country, and if you don’t work in accordance with that system you will fail even if your project is the best.”
These were the words an official from Gwede Mantashe’s mineral resources & energy department uttered to DNG Energy CEO Aldworth Mbalati at Kream restaurant in Pretoria on Monday November 2 last year, according to court papers lodged last week.
Mbalati had just rejected that official’s offer to “help” him secure a tender to provide 1,350MW of emergency power — or as he saw it, a bribe — which had led to that threat.
There was no-one else at the restaurant when Mbalati arrived, except for two officials of the department and someone he’d known for years, who had organised the meeting and whom he coyly refers to as a “business associate” of Mantashe. But after the “bribe” came up, Mbalati excused himself and left, as he recounts in an affidavit.
A few weeks later, on December 22, his company submitted its tender. Then, on March 15, Mbalati got a message from Mantashe’s “associate”, implying he’d won the bid, but the message warned: “Should I not play ball with him and his associates, [I] would not receive the appointment.”
The winner was to be announced on March 18. But hours before, the “associate” arrived at Mbalati’s office and asked if he had any “last words”. No, said Mbalati. If that’s your attitude, said the associate, you’ll get nothing.
Sure enough, his company was soon told it had been “disqualified”. Instead, Karpowership SA won the lion’s share of the tender to provide 2,000MW of “emergency power” for the next 20 years — a deal the CSIR says may cost the country R218bn.
As it happens, Karpowership SA is made up of the Turkish power firm Karadeniz and an empowerment partner 20% owned by lawyer George Mokoena, who previously advised (state capture implicated) deputy minister David Mahlobo and (fraud accused) ANC leader Bongani Bongo.
Just to rub it in, Mantashe’s associate contacted him a few days later to ask if he’d “learnt [your] lesson”.
It’s a narrative that lies at the heart of Mbalati’s 544-page application to stop the “emergency power” tender and have it reviewed to ensure the rightful winners get the job.
Mbalati told the FM this week: “Look, I believe I was the best bidder, but potentially there were others among the 28 bidders who deserved to win. So be it — but what I know is, I have evidence that this was subject to malfeasance.”
Speaking to the FM, Mbalati says he didn’t take the decision to take government to court lightly. “Look, this is grand corruption. And the people I’m opposing have a lot to lose. I have two small kids, and I need to think about that. And I’m still young enough [he’s 37] that I’ll be running a business after this. So, even if I win, it may be a hollow victory.”
But, he says, he had to “take a stand against impunity”. There’s a profound irony that this “bribe” was allegedly proposed even as deputy chief justice Raymond Zondo’s state capture commission was hearing skin-crawling evidence of how blockbuster corruption had wrecked SA.
Mantashe himself appeared at the commission three weeks ago, and tied himself in knots trying to explain the ANC’s ethical ambivalence about holding its members accountable. “No member of the ANC is uncorrectable. The ANC is patient in dealing with its members,” he said.
Too patient, perhaps. Mbalati’s claim implies that, without “connections”, state contracts are simply inaccessible.
Here you have to ask: what value did the Turks see in getting into bed with Mokoena, other than his political links? As the DA’s Kevin Mileham told the FM: “Mokoena has no experience in the energy sector, so how is he now suddenly one of the beneficiaries of a R218bn deal?”
By contrast, Mbalati has spent 13 years in the sector, and describes himself as “not your typical BEE player, but an entrepreneur who knows the energy industry”. Along the way, he listed a company on the Frankfurt Stock Exchange and built DNG Energy, a company with R12bn in assets.
Mbalati studied maths and accounting, and started out in the property sector. But his epiphany came while gridlocked in traffic on Grayston Drive in Sandton for two hours, as the first bout of load-shedding hit SA in 2008.
“My parents have PhDs in education — my father is a school principal and my mother is a school inspector — and they taught me that … you need patience to do something properly, and … if you want to change something, do it yourself,” he says. Energy, he says, was an obvious career path. Today the change he wants is for a decision he calls “unlawful” to be reversed. In part, he says, this is because Karpowership SA isn’t offering the optimal energy plan for SA.
Under Karpowership’s deal, huge power ships will be moored in three SA harbours for 20 years. The Daily Maverick, which has covered this story well, describes those ships as giant “floating kettles” which “will kill off a variety of marine life” and “disrupt the wider marine ecology”.
There are other questions too. As the FM reported last week, the average weighted cost of this emergency power is R1.57 a kWh — far pricier than the 71c a kWh implied in the recent round of renewable energy bids. And as expert Ted Blom asks, what sort of “emergency deal” lasts 20 years?
DNG Energy’s deal, by contrast, is premised on natural gas and the building of three new power stations to handle this gas, some of which will come from Mozambique.
But unless Mbalati can stop it, the eight projects chosen (led by Karpowership SA) will begin producing energy by August next year. Even though, he believes, this “flawed, unlawful and gained outcome” would be bad for SA.
The final insult, he says, is that this request for a bribe happened at the height of the Zondo commission without “any shade of shame”. It shows, he says, there are senior officials whose sole goal is to “find a new avenue to plunder [the] resources of an already ailing economy”.
The message warned that should I not play ball with him and his associates, I would not receive the appointment