Coalition govt partners fight as Tshwane mayor lands in hot water over multi-billion energy deal

An unsolicited offer of R48.6-billion from an Australian energy service provider for refurbishment, operating and maintenance of the Pretoria West and Rooiwal power substations has caused a stir in the Tshwane metro.

A proposed offer of R48.6-billion for the revamp of two Tshwane metro power substations by an Australian company has been slammed as “unlawful and politically influenced” by political parties.

The company, Kratos energy, submitted a proposal for an unsolicited bid (closed offer by a sole provider and not open to the public) to refurbish, finance, operate and maintain Pretoria West and Rooiwal power stations for 30 years.

According to the proposal, the deal will provide jobs and avert load-shedding.

The scope of work includes that Kratos will change the stations, that have not been in effective use for eight years, to gas power stations and supply energy to Tshwane customers.

According to National Treasury requirements for municipalities, unsolicited bids are only approved if the supplier’s services are “innovative, unique and provided by a sole supplier”.

An application for land use on the stations was tabled at the council on Tuesday and opposition parties, including coalition government partner ActionSA, rejected the report.

The parties raised concerns that Kratos was not the only service provider capable of revamping the substations and therefore approving its offer as an unsolicited bid was “unlawful”.

Furthermore, the EFF and ANC accused mayor Randall Williams and his office of exerting undue political influence to have the bid approved despite officials raising concerns of possible flawed supply chain management (SCM) processes in the deal.

The EFF released a recording of a Tshwane metro meeting held in August 2021 about the deal on which Williams can be heard telling officials that it was not their duty to approve the offer, but to “implement his decision and approve the unsolicited bid”.

The officials had proposed an open tender process (competitive bidding) as they asserted that the services provided by Kratos were not unique.

“It is the role of the executive authority to take strategic decisions and the role of the administration to implement those decisions whether they agree or disagree,” Williams said on the recording.

“The administration does not have the right to oppose a decision taken by the executive,” he said.

Williams said his decision to support the deal was based on the municipality’s commitment to changing from coal-burning power stations to gas-dependent stations.

“When this unsolicited bid came in, I decided that it should go through as an unsolicited bid. Your duty as officials was then to implement that decision in line with the National Treasury guidelines and not to oppose my decision,” Williams said.

Tshwane mayor Randall Williams. Photo: Ron Sibiya

Chief Operations Officer James Murphy can be heard saying that he failed to identify what makes the deal “unique” to prohibit the metro from undertaking a public tender bidding process.

“It is our job to implement the instruction lawfully and that is what we are trying to do,” Murphy said.

“I do not buy that the project is innovative. We will get into trouble, it is not an unsolicited bid. I am saying let’s open it up [competitive bidding].”

Williams could be heard saying that there might have been a collapse in communication between his office and the officials on the deal. He proposed that the concerns about unsolicited bids could be raised when the report is published for public participation.

According to the metro, the deal was published last year for public participation and there were no objections to it.

Coalition government partner ActionSA requested an independent investigation into Williams and Chief of Staff Jordaan Griffiths about alleged undue political influence on the SCM process of the deal.

ActionSA council caucus leader Sizwe Skhosana proposed public competitive bidding for the revamp of the stations. Both ActionSA and the EFF threatened to open a criminal case against the municipality on this deal.

EFF regional leader Obakeng Ramabodu said the party would request ANC councillors to support their call for Williams to step down from his position. “In the next council meeting we will propose a vote of no confidence against Williams,” Ramabodu said.

He said the deal was aimed at privatising the municipality’s power supply. “There is no law that allows the mayor to approve unsolicited bids. No law says the mayor can decide on SCM processes,” he said.

Ramabodu accused Williams of personal gain in the deal and that Williams has a relationship with the Kratos project manager.

Williams said ActionSA and the EFF wanted to “discredit and smear” him and the recording was taken out of context.

He said the Kratos offer was a good investment for the metro.

“The proposal seeks to re-purpose the city’s coal power plants, which have not been used since 2014, and convert them to use gas.

“The intention is to generate over 800 Megawatts of power over the long term and the estimated amount of direct investment is R26-billion. (It’s) a solution that could end load-shedding in our city,” he said.

Williams also threatened legal action against “individuals who have defamed” him.

WATCH : Tshwane council meeting

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