The Karpowership-SA business model in ownership is compelling for BEE
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Clyde N. S. Ramalaine
OPINION - Antonio Gramsci, the Italian philosopher, introduced us to the construct of an interregnum, in which he identifies societies periodically in crisis.
The crisis consists of the fact that the old is dying and the new cannot be born; in this interregnum, many morbid symptoms appear. It would be no understatement to assert South Africa details a multiplicity of crises.
Among others, since late 2007, SA evidence a nation in an energy crisis with the phenomenon of load-shedding increasingly becoming the order of the day.
Intermittent and in recent years, more regular interruptions in power supply confirmed a grid taking strain and surrendered to a combination of original apartheid racialised planning and post-apartheid context ill-preparation planning.
The burden of connecting the apartheid excluded masses from the grid naturally became the task of the post-apartheid state in the mission of ending spatial racism.
Andres Vega, a recognized international energy attorney, in his April 2, 2021, article headlined: ‘Powerships: A Solution for Africa’s Energy Short Supply ‘ in his preamble writes, “Energy poverty represents one of the most critical challenges for development in Africa. “According to the International Energy Agency (IEA), in 2019, the continent had more than 580 million people without electricity access, with that number expected to grow to 660 million people by 2030. Perhaps, the subsequent observation of Vega, “Energy poverty is catastrophic not only for on a macro-economic level, but also profoundly impacts people’s daily lives, as without energy, infrastructure, schools, hospitals, and others essential services cannot be developed” is where I wish to light my proverbial candle. One does so in attempt of making sense of what is unfolding in the aftermath of the announcement of successful bidders.
What was intended to be a progressive and perhaps proactive plan on the part of the DMRE as representing the South African Government in its request for proposals from independent power suppliers to aid in stymieing the prevailing South African supply challenges over the last few weeks has come to define a plethora of claims, nuances, accusations, threats a mooted parliamentary investigation and even pending court cases.
Let me be cynical to upfront ask, did we expect that this type of bid, for its economic size, lifespan and how wealthy it would make those who succeeded, would not stir the ire of some?
Particularly those who have always felt nothing in SA should happen without them.
Were we that foolhardy to assume the awarding of contracts to blacks as new major players will not attract comment and anger from certain interest groups?
Anybody who lives in SA knows that whenever whites win any contract, it is naturally assumed as deserving since they preside over the necessary skills for it and therefore, the contract would have been attained on merit.
On the contrary anytime blacks participate and win, it is questioned as born from corrupt origin, necessarily undeserving and translating to incompetence. These are the stereotyped themes that define the South African canvas of metanarratives regardless of who sits in Mahlamba Ndlopfu or Tuynhuis.
We must remain cognizant of the calibrated intertwined narratives at play to appreciate what is happening around the bid announcement winners.
Lending credence to the axiom, things are never what they seem or purport when dynamics of politics, capital interest and race vibrate more than in the background.
The aftermath of the DMRE announcement of the successful bidders for the RMIPP’s discourse across inter-disciplinary interest has been vibrant and that must be welcomed.
As the country battles constant power outages, Minerals and Energy Minister Gwede Mantashe has announced eight successful bidders to produce independent power.
What are the successful bidders to deliver?
As we all should know, the South African Government approved the Integrated Resource Plan 2019 ( IRP) outlining the energy mix for the next decade to add more energy sources to the mix and the decommissioning of some of Eskom’s coal-fired plants. According to the Minister of DMRE, Gwede S. Mantashe, successful bidders would provide a combination of power contributions to take the strain off Eskom. The minister holds that the new additions would offer welcome relief.
“Eight preferred bids totalling 1,845 megawatts (MW) and a further three eligible bids totalling 150MW.”
He went on to say, “It is envisaged that the first power from these projects will be connected to the grid from August 2022.”
Mantashe furthermore shared that thousands of jobs would be created, with particular emphasis on black ownership. The new projects are expected to be operationalised in functionality over the shorter period earmarked as soon as possible. He said that the successful bidders had a deadline to obtain finance and begin to function.
It is envisaged that the first power from these projects will be connected to the grid from August 2022.
Who among the successful bidders is more in the news in recent times, and is this natural or is there an orchestrated attempt at discrediting such?
There is little doubt that Karpowership-SA turned out the biggest winner with three successful bids for its respective Coega, Richards-Bay, and Saldanha projects. Karpowership-SA will anchor its liquid natural gas power ships at the three coastal towns to provide ship-to-shore electricity.
Karpowership-South-Africa is a Turkish-based Karadeniz Holdings subsidiary and is a registered company with local BEE partners and registered offices in South Africa.
Vega on the usefulness of these power ships contends, “these power ships have the advantage of providing almost immediately electricity, to they are an excellent option to meet the supply gap in the short term compared to the years it takes to design, award and commission other types of power generation projects.
Another feature of the power ships as they generate power from LNG; they are a viable option for most coastal countries, especially countries with access to such resources.”
An added advantage of power ships is that that they do not need any land or significant development Karpowership-SA is on record to have said it can provide adequate electricity supply with enough electricity to stop most load-shedding – and at a lower cost than Eskom.
In this context, the announcement of the Karpowership – SA awards as the preferred bidder for three of the sites renders it for some an automatic questionable outfit.
On the one hand, basic corporate jealousy among a crossbreed of vested parties, albeit fellow-bidders who either lost or was disqualified, appears to be the order of the day.
While this is not surprising, is there perhaps a more extensive campaign at play?
What, if so, may inform the rationale for such? Is there a concerted attempt to focus on Karpowership- SA and to draw dotted implied lines, as is so often the praxis in South African politics?
On the other hand, can it be said that Karpowership is conveniently dragged into the political and economic fray by those who have either old gripes or personal bones to pick with DMRE and its minister Mantashe?
The fine-tuned ear hears more than the noise. Is Karpowership- SA hauled into proxy wars of specific interest groups?
The longer one listens to the various accounts as published in a variety but not surprisingly platforms such as AmaBhungane, the aggregate mind attests perhaps a one-dimensional frame precariously conditioned less interested to engage in the content of the successful bidders.
It registers a debate less interested in cutting -edge technology skills since hitherto SA did not produce these solutions.
It can and must be argued that these power ships are a first in SA.
What instead defines our current discourse on the RMIPP’s is a mix-masala of blatant annoyance, racist – anger, and dismay where objectivity is seen as dreaded disease.
The shock that usual players in the SA economic matrix of cross-pollinated monopoly power was sidestepped is finally realised. Is this not the reason for the emerging spirited multi-dimensional crafted campaign from the elites again to keep SA hostage in the name of themselves as its true custodians.
Losing Bidder DNG’s claims
Since the announcement media is a flood with the views and actions of DNG, a disqualified bidder.
DNG, an entity that among others include Lord Peter Hain and Kevin Wakeford in recent days captured if not fed into the emerging dominant narrative as mumbled by absorbing interest from coal companies, coal-transporters, mining companies, solar and wind energy protagonists, some organized-labour formations, some professionals, and opposition political parties.
DNG has filed a court case alleging corruption in the uprun and finalisation of the bid.
The essence of the claims levelled by DNG centres on the account of its Director Aldworth Mbalati, who allegedly was approached by DMRE officials.
Critical to the DNG claims is Minister Gwede Mantashe, whose wife Nolwandle is reportedly involved. Karpowership – SA maintains its innocence in any bid corruption allegations as levelled by DNG in this instance, a losing bidder.
Karpowership’s stance is more than appropriate and correct to argue as an independent bidder, t responded no different to all which may have resulted in them too losing. Karpowership is correct, categorically asserting it holds no brief to defend or attack the minister because it, as a professional and duly constituted entity alive and active in the energy space, necessarily participated in a transparent process.
Noteworthy about the focus of the DNG accusations is its interest not to accuse every other bidder making up the five successful bidders but to only flag Karpowership-SA.
DNG, therefore, must explain why it does not question the awarding of the contracts to the others and why its focus is only limited to Karpowership.
While DNG may or may not have a legitimate case, it simply cannot escape the fact that its Mbalati on a balance of scales is complicit in the very corruption given the fact that he and DNG presided over information for the better part of 6 months and never saw any need to disclose this in the public sphere.
The follow-up question for DNG is, in a hypothetical setting, was its bid successful would there have been any litigation matter initiated on their part?
DNG must answer why it allowed or permitted itself from inception with the interactions between DMRE officials and Mr Mbalati that was uncovered to still have participated in what they now claim is a flawed process.
Why did it not seem legitimate and necessary grounds to make public then already the flawed, heavily influenced by people who claim proximity to the minister, and the prospective corruption it now alleges.
Indeed, there is a case to be made of sour grapes on the narrow scale and complicity in the crime by not alerting the relevant authorities timeously.
DNG must, therefore, also explain what it was banking on with the information it had at hand.
While DNG became the face of corruption claims, the dominant narrative in South Africa continually defines the proverbial kaftans of racialised corruption immanent in black identity.
Hence while we may be flooded with news from environmental lobby groups about how unhealthy the choice for gas in this instance is, we dare not be fooled to assume these are naturally pure humanitarian and not interest – free concerns.
What may be the role of Karpowership-SA in the redefining of the BEE landscape?
An involuntary thought that thrust itself on my mind – is Karpowership-SA the antidote of what we have come to know in what I coined as ‘BEE pollution’ for the better part of the post-apartheid context?
To appreciate this notion of an antidote, we must first appreciate the toxic history and current reality of the policy of Black Economic Empowerment even in its extended forms of BBBEE, and how it came to be experienced as lived reality in post- apartheid South Africa.
I fear nor reprise to state here categorically, until now, there has never been any BEE deal that occurred independently of the historical colonial and apartheid beneficiaries of racialised identities and systems.
That means when SA for diverse reasons often refer to the crop of first, second and third-generation of BEE beneficiaries [if we may use ten-year intervals to define a generation in post-apartheid description], we must simultaneously recognise the undeniable reality that BEE made more whites wealthy than during apartheid or any time of the colonial system of governance.
The Karpowership–SA business model in ownership, could hold the potential to become a compelling business case for BEE’s future academic and student.
While it is early days to heap praise on Karpowership- SA, it is crucial to upfront recognise the uniqueness of its operational model and shareholding structure.
In this sense, we must wait to see if Karpowership-SA within the context of the earmarked 20 years as we advance would live up to the whole meaning of that original intent of its shareholders.
A reality informed by more than a real need in energy that in essence speaks to a much broader fact of a disenfranchised black majority that despite political access to a vote as the democratic franchise continues to languish in abject poverty, jobless, denied in access to the structurally flawed economy and deviously designed markets and sectors.
A world where informal settlements, the bequeathed legacy of the heretic apartheid system now pronounces itself as entrenched by a black-led government defines the new anomalies of the world’s most economically unequal society.
Unsolicited caution to Karpowership-SA on an unfolding intensifying narrative.
It would seem appropriate to proffer even some unsolicited caution to Karpowership–SA that it would commit a grave error if it casually ignored the unfolding to some degree plausibly duly sponsored de-campaigning exercise.
If that is my peripheral caution, an even more important, more central warning would be for Karpowership-SA to ignore the time, context of its existence and the burden directly placed upon itself to lead in modelling true economic empowerment.
It, furthermore, warrants hearing those who express their dissatisfaction and who are necessarily public about their views on the bidding process and the successful bidders. It must be attuned to those who conflate the bid with its winners in the narrowness of convenience. It must remain vigilant to the absence of investigative journalists to engage, for example, those who challenge the fact that it succeeded in three bids but fails to question others. Its awareness of a South Africa in what the Gramscian notion [interregnum] detailing the old and new, where the new announcing it is coming while the old protesting its demise.
The groups active in the discourse ostensibly comes proverbially draped in different garments, but they cannot deny the communality of their interest and cause.
Neither can they deny that at the nucleus level there is disdain, mistrust less informed by the genuineness of them caring for the advancement of South Africa but more so because this bid that consciously excludes whites has registered on the scale of severe interest and it has left more than a reverberating echoing, and cries of, we have been out- strategised.
Those who critique the Government’s decision for a hybrid migratory energy transition condemn it since this situation sees to 1220MW, approximately two-thirds of the 2000MW of energy power procurement or Risk Mitigation Independent Power Producer Procurement is for gas to power generation.
They protest that the entire process was designed to force gas power generation plants into the system.
Hence, they are calling for an investigation, notwithstanding public knowledge the earlier mentioned Government decision for Integrated Resource Plan 2019 (IRP). They equally prove loud on the inserting the relevance Parliament in its “constitutionally predicated responsibilities of law-making, oversight, and public participation”.
It correctly reminds us all, Section 217 of the constitution state that procurement must be fair, equitable, transparent, competitive, and cost-effective.
What is indisputable is the real fight is for the burgeoning gas market which has now been enabled by Karpowership-SA and the fight is to control that potentially ludicrous market.
The convenient and dualistic morality of an environmental sensitive interest group
Furthermore, the environmental interest group leans on Section 24, which includes the right to have the environment protected for the benefit of present and future generations. While the South African Constitution is nowhere in dispute, we must ask the environmental lobbyist for their consistency to explain the deafening silence on the centuries-old mining complex economic system that has done just as much damage to the environment.
Where is the energy to challenge the presence of the centuries-old mining sector for its undeniable role in harm to the environment?
More so, where is the environmental interest group when communities are left surrounded by 14 mines and die of poverty excluded from the wealth of the proceeds denied an opportunity to benefit?
Where is the lobbyist when the constitution speaks of equality?
Why do they not campaign with such verve against white led monopolies that are directly responsible for the lack of development at both social and economic spheres for the mining communities?
Hence when we hear the environmental lobbyist in the silence on of the mining and fishing communities, how do we take them seriously in this instance to condemn gas when South Africa has legislation and policy of a hybrid system?
It is perhaps noteworthy to remind us that South Africa remains an active co-signatory to the Kyoto protocols on climate control and is present in the global race against decelerating the carbon emission footprint since it is bound to all UN-Nation conventions to work for such.
Permit me to ask, will we afford the long empowered elites, be they in business, politics, organised labour formations, the new forms of civil-society garments and the misplaced organised labour formations, the luxury of continuing our economic denial and access to a meaningful life because we are simply without agency to engage their campaigns?
Shall we perpetuate their misgivings and entertain the frivolous campaigns when we know these confirm a sparsely veiled agenda of keeping us longer in literal and economic access darkness.
Or shall we engage the successful bidders like Karpowership-SA and all others to keep them accountable for their assigned role? A position in which they will employ their technology skills for the benefit of the masses, the new academy energy they must produce where ordinary South Africans, our children, for that matter, can dream and reimagine our society where access to power is not a privilege?
Shall we ask each of the successful bidders what will be their direct and indirect contribution to changing the face of this economically unequal society?
Shall we ask them for their direct, verifiable, and measurable, meaningful contribution to the SA communities in projects and programmes and utilitarian infrastructure where they will be operating?
Shall we ask them for their plans to evidence real job-creation and the transfer of skills as to how this will be measured over the life cycle of these contracts?
Dare we know what their legacies will be in reimagining a South-Africa other sacrificed with their lives. Is it not time to separate the chaff from the wheat, is there not work to be done?
How do the campaigns of the elites help the cause, or are they meticulously planned to frustrate and keep the successful bidders in court cases while the latter has the mandate to deliver?
Clyde N. S. Ramalaine is an academic and political commentator.