Mantashe must come clean about Powerships

25 April 2021

Recent revelations about the involvement of former special advisor to ex-State Security Ministers David Mahlobo and Bongani Bongo, Thabo George Mokoena, in the Karpowerships bid for the Risk Mitigation Independent Power Producers Procurement Programme (RMIPPPP) calls into question once again the legitimacy of this as a solution to South Africa’s electricity crisis.

George Mokoena, not to be confused with Thabo Shadrack Mokoena, the Director General of the Department of Mineral Resources and Energy – the implementing department of the RMIPPPP, is according to reports a 20% shareholder in Powergroup SA, which is Karpowership’s BEE partner.

The DA calls on Minister of Mineral Resources, Gwede Mantashe to come clean about the real basis of the Karpowership bid, and why the RMIPPPP was set up from the start to favour this solution. We demand that the records of the bid adjudication be made public, as well as the minutes of any deliberations in which the various bidders were evaluated. While we acknowledge the urgent need to secure a consistent and viable electricity supply for our country, this cannot come at the expense of our environment or our values as a country.

The BEE shareholding is highly questionable, because there is little local benefit (such as jobs or capital investment) to leasing these powerships for a 20 year period, and appears to be little more than fronting in order to line the pockets of the connected few. In comparison, other RMIPPPP projects are investing significantly in infrastructure and local manufacturing, and will result in economic development and job creation.

The Karpowerships solution has been touted as a “no regret” option by the Department, however in the Portfolio Committee meeting last week, they were at a loss to explain how importing Liquified Natural Gas to fuel these ships, subject to international market pricing and exchange rate fluctuations, would ease the electricity tariff burden on cash-strapped consumers. The Department suggested that the proposed 20 year contracts were necessary to amortize the capital costs, but again, could not explain what these costs would be given that the ships themselves are leased.

We have seen the damage that politically connected contracts have done at Medupi and Khusile. South Africa cannot afford to be locked into a long-term deal with Tenderpreneurs.

Issued by Kevin Mileham, DA Shadow Minister of Mineral Resources and Energy, 24 April 2021