Parliament, Wednesday, 4 August 2021 – The Portfolio Committee on Mineral Resources and Energy yesterday heard two legal opinions from Parliamentary Legal Services on whether it is legally bound to request the South African Nuclear Energy Corporation (Necsa) and the Central Energy Fund (CEF) to appear before it to account on their annual performance and strategic plans.
The two entities did not present their performance and strategic plans for the current financial year on the grounds that schedule 2 entities are not obliged to table these plans in Parliament.
The committee also wanted to legal opinion on whether it can still intervene and conduct oversight over procurement on the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP). This is related to the allegations of corruption shrouding the awarding of a contract to the Turkish-led Karpowership Consortium, which is now the subject of litigation filed by the energy consortium DNG Power Holdings.
The RMIPPPP was released to the market in August 2020. The aim of the programme is to alleviate short-term electricity supply constraints and to reduce the extensive utilisation of diesel-based peaking electrical generators in the medium-to-long-term.
In giving an overview of what led to the committee to solicit a legal opinion on Necsa and CEF, the Chairperson of the committee, Mr Sahlulele Luzipo, said the entities did not appear before the committee during the year under review. This was based on the fact that they are schedule 2 entities and therefore they submit to the Minister of Mineral Resources and Energy for approval.
The committee understands that as schedule 2 entities, Necsa and CEF are not legally compelled to table annual performance and strategic plans in Parliament. It also notes Parliament Legal Services’ contention that they do not receive funding through the Appropriations Bill. However, all entities are subject to the committee’s oversight ambit and when public entities experience liquidity challenges, they rely on a Special Appropriations Bill for relief.
Mr Luzipo said that according to the National Assembly Rules, committees have a legislative right to call any entity or person to appear before them if that entity or person has information deemed necessary in the performance of the committee’s oversight duties. He added: “This implies that at any given moment, if a committee needs any kind of information in the furtherance of its legislative responsibility, a committee is entitled to it.”
The committee has resolved to communicate this to the Department of Mineral Resources and Energy and to invite the two entities to appear before it to present their annual performance and strategic plans for the 2021/22 financial year.
The committee also considered the issue of the multibillion-rand RMIPPPP tender process, which has been dogged by allegations of corruption and departmental manipulation of procurement procedures. The committee heard that it has a jurisdiction to conduct oversight over the tender process, despite the fact that it is now the subject of litigation.
According to Parliament’s Legal Services, the committee still has a legislative mandate to exercise its oversight on the matter, despite it being subject to legal proceedings. Mr Luzipo therefore suggested that an inquiry should be set up to investigate the allegations of corruption and manipulation of the tender.
Mr Luzipo said a committee inquiry process should commence and the Minister of Mineral Resources and Energy will be called upon in the first instance to give an overall account on the purpose of the RMIPPPP. The minister will also be given an opportunity to reply to the allegations of undue influence and possible manipulation in the awarding of the tender. The minister will also have an opportunity to provide clarity on the action taken against anyone who compromised the tender process.
Based on the Minister’s responses, the committee will make a determination on the way forward, including possibly of inviting DNG Power Holdings and those individuals implicated in corruption. Should the committee decide to conduct a formal inquiry into the RMIPPPP, the Speaker of the National Assembly will be approached.
The committee is saddened by the passing of committee Member Mr Mthokozisi Nxumalo, and sends its heartfelt condolences to his family and friends. It will send a delegation to the family as a gesture of support at this difficult time.
The committee also noted the violence and destruction of property and infrastructure in KwaZulu-Natal and Gauteng recently. It is considering holding an emergency meeting to discuss, among other things, an oversight visit to both provinces to assess the impact of the violence and its implications for the mineral resources and energy sector.
ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF THE PORTFOLIO COMMITTEE ON MINERAL RESOURCES AND ENERGY, MR SAHLULELE LUZIPO.
For media enquiries or interviews with the Chairperson, please contact the committee’s Media Officer:
Name: Abel Mputing
Parliamentary Communication Services
Cell: 081 503 1840
E-mail: amputing@parliament.gov.za
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