/ 9 March 2022

Inquiry into Karpowership winning power bid scrapped

A recent high court ruling on another matter led parliament’s portfolio committee on mineral resources and energy to halt the inquiry into the risk mitigation independent power producers procurement programme linked to Karpowership.

The inquiry into procurement processes that led to Karpowership winning the bid to add power to the grid has been scrapped by parliament. 

On Tuesday, the majority of the members of the parliamentary portfolio committee on mineral resources and energy voted to do away with the inquiry into the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP), an initiative to add 2 000 megawatts of new power to South Africa’s electricity grid and to alleviate electricity supply constraints. 

The same committee voted in favour of the inquiry in August 2021 and in December resolved, in principle, on the terms of reference that will guide the inquiry on allegations of corruption and malfeasance during the process of appointing preferred bidders.

The inquiry was to take place in the first quarter of 2022 and to proceed for a period not exceeding 120 days. 

The decision to scrap the inquiry was taken after legal opinion was obtained from Parliament’s legal service division. 

The division referred to a recent high court judgment on an application to set aside the department of mineral resources and energy’s decision to appoint preferred bidders for the RMIPPPP. The case was dismissed, with costs going to DNG Power Holdings, which challenged the process.  

Natural gas company DNG applied to have the RMIPPPP process halted, saying there were procedural irregularities, conflicts of interest and corrupt activities that resulted in the improper awarding of preferred bidder status. 

A year ago the mineral resources and energy minister, Gwede Mantashe, announced the preferred bidders for the RMIPPPP. These were ACWA Power Project DAO, Karpowership SA Coega, Karpowership SA Richards Bay, Karpowership SA Saldanha, Mulilo Total Coega, Mulilo Total Hydra Storage, Oya Energy Hybrid Facility and Umoyilanga Energy. 

The Turkish-led consortium Karpowership SA was the largest bidder.

Parliamentary legal adviser Andile Tetyana said the parliament’s legal services division understood the recent court judgment to mean that the department’s decision to appoint preferred bidders was legitimate, thereby making an inquiry futile.  

“The court has … come to a factual and legal finding that the process was fair and transparent,” Tetyana said.

Anathi Madubela is an Adamela Trust business reporter at the M&G.