Questions, concerns remain about Karpowership bids

3rd May 2021 By: Simone Liedtke - Writer

Opposition political party, the Democratic Alliance (DA) has called on Mineral Resources and Energy Minister Gwede Mantashe to provide more insight into the real basis of the Karpowership bids and to explain why the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) seems to have been set up to “favour” this solution.

The call for action follows revelations about the alleged involvement of former special adviser to former State Security Ministers David Mahlobo and Bongani Bongo, Thabo George Mokoena, in the Karpowerships bid for the RMIPPPP, which “calls into question once again the legitimacy of this as a solution to South Africa’s electricity crisis”, the DA said in a statement.

Mokoena is, according to reports, a 20% shareholder in Powergroup South Africa, which is Karpowership’s black economic empowerment (BEE) partner, the DA says.

The DA has, therefore, requested that the bid adjudication records be made public alongside the minutes of any deliberations in which the various bidders were evaluated.

The political party acknowledges that there is an urgent need to secure a consistent and viable electricity supply for South Africa, but laments that this “cannot come at the expense of our environment or our values as a country”.

It adds that the BEE shareholding is “highly questionable”, owing to the little local benefit (such as jobs or capital investment) in leasing these powerships for a 20-year period and that there “appears to be little more than fronting to line the pockets of the connected few”.

In comparison, other RMIPPPP projects are investing significantly in infrastructure and local manufacturing that will result in economic development and job creation, the DA says.

The Karpowerships solution has been touted as a “no regret” option by the Department of Mineral Resources and Energy (DMRE); however, in the Portfolio Committee meeting last week, the DA notes, the department was “at a loss to explain” how importing liquified natural gas (LNG) to fuel these ships, subject to international market pricing and exchange rate fluctuations, would ease the electricity tariff burden on cash-strapped consumers.

The DMRE suggested that the proposed 20-year contracts were necessary to amortise the capital costs but were not able to 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 Kusile. South Africa cannot afford to be locked into a long-term deal with tenderpreneurs,” the political party emphasises.

In a separate statement from Saldanha Coastal Links’ Carmelita Mostert, she noted her frustration around the organisation’s pleas “falling on deaf ears”, adding that the presence of these ships “will have a real impact in scaring off the fish in the area, and we fishers will be the one’s going hungry”.

Green Connection’s Liz McDaid – who played a key role in stopping the illegal R1-trillion nuclear deal in 2017 – also calls on "the people" to act.

“There seems to be an agenda to force the project ahead despite social, environmental and economic concerns. Something is fishy in South Africa’s energy sector,” she says, noting that “procurement deals like the nuclear deal were not set up to benefit South Africa and were stopped by legal action”.

The Green Connection’s community outreach coordinator Neville van Rooy, however, says the organisation is still studying the report, but notes that a key issue which is cause for concern is “why the government would consider a 20-year deal as a solution to a current emergency situation”.

“These ships will be anchored off our coastline for 20 years, creating noise pollution constantly, which can be heard for more than a kilometre. The presence of these ships in the ocean will also have a fatal impact on birdlife in the area with an estimated 155 birds being killed yearly as a result.”

Stanger community member Khalid Mather says the government’s decision in considering the Karpowerships as preferred bidders “smacked of similarities with the previous apartheid regime”. 

“Ignoring the concerns of our people and especially the coastal communities most affected, speaks to the marginalisation of communities, much like what happened in the past.

"Once again, it is about maintaining the interests of a few at the expense of the masses. Not many of the fishing communities along the KwaZulu-Natal coastline have been consulted about the Karpowerships, while they are the ones who will suffer from the effects of the added pollution and other negative environmental impacts these vessels pose.”