Mantashe summonsed by Parliament to appear

…..articled dated 15 August 2021…..

Parliament demands oversight on DMRE energy plans……

Attempting to crack open once again the mysterious world of ANC oil, gas and energy policy and the secret deals undertaken by six successive energy ministers involving Russia, Ghana, South Sudan, Saudi Arabia and now Turkey, parliamentary committee members have demanded oversight on DMRE energy plans and the appearance of Minister Mantashe to brief Parliament on the status of the highly publicised Karpowership energy supply contract.

With Parliament suddenly closing, it appears that the Minister is “off the hook” for the moment but clearly matters with the Department of Mineral Resources and Energy on various subjects are coming to a head.

Another secret deal

The Karpowership plan was to lock South Africa into a 20-year powership contract with Turkish suppliers for 3 vessels moored at Richards Bay, Nqqura and Saldhana Bay in order to produce 1 220 megawatts under South Africa’s 1  845MW emergency power programme for an estimated R10.9-billion fee annually. It was also rumoured that Shell Middle East was to be the preferred supplier of natural gas to power the vesels.   Minister Mantashe toe tapping on energy issues

Insofar as the  contract was concerned, news media exposed an account of an alleged interest of a family member of the Mantashe family in the R227bn deal under the emergency Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) allocation for additional power supplies.

Mantashe in charge

Now , all is held up, it would appear, on the karpowership deal, due to the absence of approval from environmental minister Barbara Creecy in terms of state process.   In terms of a recent report from CSIR on the whole concept, a report which was brought to the minister’s attention in parliamentary hearings on the matter by Centre for Environmental Rights and groundWork objecting to the Turkish deal, the powerships idea is not only prohibitively costly but is also not the right energy answer.

The report adopted the view that proposal made by DMRE that such a deal was “vital” to secure SA’s energy future was completed outweighed by more environmental suitable options in the current energy master plan already in place involving solar and wind energy.  On this, Minister Creecy agreed, although an appeal may have been lodged by the sucessful tendering company.

Minister Mantashe has also vehemently denied to Parliament the rumour that perhaps his wife was somehow involved in the karpowership deal, a matter raised by DA members of Parliament on the enrgy committee.

A whole lot more

At the same time, Parliament has also requested that DMRE DG Adv Thabo Mokoena give more detail of the department’s plans for nuclear energy. This is in respect of Minister Gwede Mantashe’s policy pronouncement during this year’s Budget Vote in Parliament, that DMRE plans to issue the Request for Proposal (RFP), at the end of the 2021/22 .

Also, a request has been made by MPs for Central Energy Fund to spill the story on the proposed merger of iGas, Strategic Fuel Fund and PetroSA to become the National Petroleum Company. PetroSA part of new energy plan

Holding back

Parliament’s portfolio committee on mineral resources and energy was taken aback earlier this year when it was informed that both the Central Energy Fund (CEF) and the South African Nuclear Energy Corporation (NECSA) would not be tabling their annual performance plans or their strategic plans to Parliament since, as was maintained at the time by both, the  Public Finance Management Act did not require them to do so.

With it known that DMRE  has talked of PetroSA becoming  “The National Petroleum Company”  it is clear that once again a direction is being taken on energy matters that steers things well away from parliamentary oversight, harking back to the days of past president Jacob Zuma, the architect of the idea of hiving off the ministry of energy from mineral resources as a personal fiefdom.

In limbo for years

PetroSA for years has run the old Soekor-owned but now state gas-to-liquids refinery known as Mossgas, a world first in that technology, but which is currently “mothballed” due to supply failure from its own offshore gas fields in nearby Block 9. Total Oil’s strikes in the Bralpudda on SA’s West Coast and in the Oteniqua Basin off Plettenberg Bay, seen as a saviour for DMRE, have not been furthered by Total  “due to the unsatisfactory state of relevant legislation in South Africa”.

Cut backs and lay offs have resulted much anger in the small town of Mossel Bay with no clarity from state-owned Central Energy Fund on the future of the plant, other than the a vague promised merger of all its interests including PetroSA, iGas and the Strategic Fuel Fund but no plans on the ground whatsoever.

Digging

As a result of no clarity being provided by DMRE on any of these subjects,  committee Chair Sahlulele Luzipo has therefore decided with MPS across party lines that much more must be heard from DMRE DG Adv Thabo Mokoena, their DG of energy policy Tseliso Maquebela and the Minister himself on the financial and strategic plans of both CEF and NECSA and any instructions that DMRE are giving their subsidiaries  to follow, the Minister having  been so reticent on the detail and costs of any plans and the current intentions of DMRE.

To ensure that Parliament’s rights to call for further information were legal and binding on the parties, chairperson of the energy committee, Sahlulele Luzipo, called for legal opinion as to whether Parliament was within its rights to demand that DMRE show its hand not only on the Karpowership contract but other matters. Accordingly, a Parliamentary meeting was called “To ensure that Parliament had a legal and constitutional right to call for clarification and the necessary documents in both cases from the Parliamentary Legal Advisors Office” as chair Luzipo put it.

Between the lines

Apparently, the annual financial statements for 2020/2021 for CEF, normally submitted at this time of year were held back based on financial troubles with its entities being still under investigation.  In the case of NECSA, who also held back, the reason given was that such disclosure was not necessary under the PMFA since NECSA was constitutionally a Schedule 2 entity.

During the virtual meeting that followed, advocates Andile Tetyana and Frank Jenkins, legal advisors from the Parliamentary Legal Office (PLO) answered chair Sahlulele Lupizo’s query and confirmed that as far as CEF and DMRE was concerned, Parliament was at liberty to request any document it requires that will assist with its constitutional mandate.

Safe as houses

Explained by the PLO advocates was the fact that that in the case of CEF and NECSA, the intention of the Constitution is that if monies are acquired through any channel lesser than the Appropriation Bill from Parliament then there was indeed a lesser less burden on an entity to table and report back on such matters to Parliament.

But overriding all is the constitutional necessity and parliamentary right to call for Parliament to have any documents it wants in its oversight role unless security classified.

There was also a distinction between the tabling of information, according to parliamentary rules, as a normal procedure of Parliament and submitting information on a request from a committee of Parliament, said Adv Frank Jenkins.  The chair should ask for whatever he liked from Minister Mantashe if money was involved.

Urgent meeting

MPs then re-iterated that they wished to enquire of the Minister the circumstances behind the tender allocation made by DMRE on the Karpower support power contract, rejected at this stage by the Minister of Environmental Affairs, Barbara Creecy, and from NECSA all budgets and expenditure envisaged in their strategic plans and the current budget and plans from DMRE on the RMIPPP programme.

They also demanded the annual financials from CEF and that a presentation be made on the current status of their subsidiaries. As far as NECSA was concerned, Chair Luzipo was to instruct its board to report in detail on its strategic energy plans, with financials over and above the immediate 10-year energy plan or IRP. Minister Mantashe was to be requested to attend at the same with regard to the Karpowership matter.

 

 

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