Minister denies corruption in R218 billion power deal

South African Mineral and Energy Resources Minister Gwede Mantashe and the two most senior officials in his department denied corruption in court papers responding to allegations by a losing bidder in a power tender.

Director-General Thabo Mokoena confirmed that he and his deputy met Aldworth Mbalati, executive director of DNG Energy Ltd., at Kream Restaurant in Pretoria in November, but denied they tried to secure a bribe.

Mantashe denied allegations by Mbalati that a business associate and a relative of the minister tried to interfere in the process of awarding contracts.

Mbalati, whose company unsuccessfully bid to build three gas-fired power plants in a tender for emergency power, said in the case he filed that two unidentified state officials, and the two alleged associates of Mantashe, met with him at Kream.

He said one of the government officials told him he “must be part of the system” to win a contract.

Mokoena said he made the point at the meeting that the department and the Independent Power Producers Procurement Programme Office were running “a transparent and fair process,” according to an affidavit filed at the Pretoria High Court.

“I added that if the entity Mr. Mbalati represented wished to succeed in the process, it would need to comply with all of the tender requirements,” he said.

$16 Billion

The court case, which threatens to disrupt the provision of power to an economy that’s suffered intermittent outages for more than a decade including this week, is scheduled to be heard in July.

Mbalati is seeking to have his company replace Karpowership, a Turkish operator of ship-mounted gas-fired power plants, in a contract for the supply of 1,220 megawatts of power over 20 years.

That contract is estimated to be worth 218 billion rand ($16 billion).

The IPPP Office, in its own affidavit, said DNG’s bids didn’t qualify because the company couldn’t prove it had financial backing, owned the land where plants were to be built, complied with environmental requirements and had access to sufficient fuel.

Mokoena identified Luvo Makasi, a businessman and former chairman of South Africa’s Central Energy Fund, and a person called Vuyani Gaga as the other attendees at the meeting.

He said Makasi isn’t a business associate of Mantashe’s and no relative of the minister’s attended. Mantashe, in his own affidavit, denied that Makasi was an associate and that Gaga was a relative.

Mokoena said his deputy, Tseliso Maqubela, had said to Mbalati that he needed to comply with the tender requirements in order to succeed. Maqubela said in his affidavit that he agreed with Mokoena’s account.

Makasi told Bloomberg he organized the meeting because he hoped to partner with Mbalati in the bid and Mbalati had requested that he do so.

Jilted Partner

“I was involved in the process because, we were going to partner on the bid but he did not honor his commitment on the deal,” he said by text message.

In a separate document that he forwarded to Bloomberg, Makasi said he didn’t agree with Mbalati’s version of events and he thought the DNG bid had failed because it didn’t meet requirements.

DNG said it stands by its founding affidavit.

“What is coming out of respondents’ affidavits and other parties’ responses will be dealt with properly in court, at the right time,” it said by email.

amaBhungane, a South African investigative news organization, reported on Mokoena’s affidavit earlier.

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Minister denies corruption in R218 billion power deal