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    Busa Letter To DG Dmre Tnpa Rmippp LNG

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    The Business Unity South Africa (BUSA) wrote a letter to the Director General of Mineral Resources and Energy to express concerns regarding delays in finalizing 1200MW of natural gas power projects under the Risk Mitigation Independent Power Producer Programme (RMIPPP). BUSA noted a recent high court challenge against the selection process that could delay the projects, as well as potential legal challenges to the process for allowing gas infrastructure in ports. BUSA requested clarity on actions to address these risks and ensure additional power is procured if the projects are not completed on time, given the urgent need to reduce South Africa's electricity supply gap.

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    Busa Letter To DG Dmre Tnpa Rmippp LNG

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    The Business Unity South Africa (BUSA) wrote a letter to the Director General of Mineral Resources and Energy to express concerns regarding delays in finalizing 1200MW of natural gas power projects under the Risk Mitigation Independent Power Producer Programme (RMIPPP). BUSA noted a recent high court challenge against the selection process that could delay the projects, as well as potential legal challenges to the process for allowing gas infrastructure in ports. BUSA requested clarity on actions to address these risks and ensure additional power is procured if the projects are not completed on time, given the urgent need to reduce South Africa's electricity supply gap.

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    Busa Letter to Dg Dmre Tnpa Rmippp Lng

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    Busa Letter to Dg Dmre Tnpa Rmippp Lng

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    The Business Unity South Africa (BUSA) wrote a letter to the Director General of Mineral Resources and Energy to express concerns regarding delays in finalizing 1200MW of natural gas power projects under the Risk Mitigation Independent Power Producer Programme (RMIPPP). BUSA noted a recent high court challenge against the selection process that could delay the projects, as well as potential legal challenges to the process for allowing gas infrastructure in ports. BUSA requested clarity on actions to address these risks and ensure additional power is procured if the projects are not completed on time, given the urgent need to reduce South Africa's electricity supply gap.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    43 views2 pages

    Busa Letter To DG Dmre Tnpa Rmippp LNG

    Uploaded by

    DocumentsZA
    The Business Unity South Africa (BUSA) wrote a letter to the Director General of Mineral Resources and Energy to express concerns regarding delays in finalizing 1200MW of natural gas power projects under the Risk Mitigation Independent Power Producer Programme (RMIPPP). BUSA noted a recent high court challenge against the selection process that could delay the projects, as well as potential legal challenges to the process for allowing gas infrastructure in ports. BUSA requested clarity on actions to address these risks and ensure additional power is procured if the projects are not completed on time, given the urgent need to reduce South Africa's electricity supply gap.

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    of 2

    NATIONAL OFFICE

    61 Katherine Street, Sandton, 2196


    P.O. Box 652807, Benmore, 2010
    www.busa.org.za
    +27 11 784 8000

    19 May 2021
    Adv. Thabo Mokoena
    Director General of Mineral Resources and Energy
    Republic of South Africa
    Private Bag X96
    PRETORIA
    0001
    Email: [email protected]; [email protected] (PA)
    cc: Thabang Audat; [email protected]

    Dear Adv. Mokoena

    CONCERS REGARDING THE FINALISATION OF THE 1200MW NATURAL GAS PROJECTS


    UNDER THE RISK MITIGATION INDEPENDENT POWER PRODUCER PROGRAMME
    (RMIPPP)

    It is common cause that the energy supply gap is around 5000MW and that this situation is likely to persist
    until at least 2025. Load shedding was estimated to cost the economy between R80-R160Bn in 2020 and
    continues to impede economic recovery. Security of supply to enable economic recovery is paramount
    and every and all avenues to secure additional supply in the short-to-medium term should be explored
    and leveraged. In BUSA’s view, next to the vaccine rollout, investment, and growth, are the most critical
    imperatives to address our socioeconomic and fiscal crises.

    It is in this context that BUSA would like to place on record some concerns in respect to the RMIPPP gas
    related projects:

    1. BUSA notes the recent high court challenge from an unsuccessful bidder as well as additional
    media reports in respect of the process followed to select the preferred bidders. These allegations
    are specifically centred around the 3 Karpowership SA projects. While BUSA has no opinion on
    the veracity of these allegations - a court challenge, even if unsuccessful is likely to delay the
    finalisation of these projects preventing a significant 1200MW of power from coming online.

    2. BUSA is given to understand that there is legal risk in the approach of the Transnet National Ports
    Authority (TNPA) to allow infrastructure for liquid natural gas (LNG) in its ports under the RMIPPP.
    BUSA understands that the process being adopted by TNPA to enter into agreements in terms
    of the National Ports Act with developers could be deemed unlawful with the risk of being legally
    challenged. BUSA is in the process of soliciting formal legal opinion in this regard which will be
    shared with the Department as soon as possible.

    BUSA acknowledges that intergovernmental engagements are underway to clarify this process and
    resolve any challenges. However, BUSA remains concerned that this will again cause a delay in finalising
    these contracts and prevent this much needed power from coming online.

    In addition, if such a challenge does materialise and if Government and/or TNPA are not seen to be acting
    in accordance with a procedure that is fair, equitable, transparent, competitive, and cost-effective – this
    will have dire consequences on the confidence levels of international investors and foreign direct
    investment (FDI) with the concomitant impacts on South Africa’s already strained economy and
    development.

    REGISTRATION NUMBER: 2014/042417/08


    PRESIDENT: Sipho M Pityana VICE PRESIDENT: Martin Kingston CEO: Cas Coovadia NEDLAC CONVENOR: Kaizer Moyane
    DIRECTORS: Angela Russell, Bongi Kunene, Busisiwe Mavuso, Christopher Campbell, Deidre Penfold, John Dludlu, John Purchase,
    Roger Baxter, Stavros Nicolaou, Zoleka Lisa
    BUSA requests clarity from the Department on what mitigation actions are being put in place to
    address these risks, not only in respect of these 3 projects, but more decisive action to procure
    additional power in the event that these projects do not reach finalisation in the timeframe
    required. In BUSA’s view, it is critical that the supply gap is not exacerbated and that all efforts
    are made to procure additional supply expeditiously.

    BUSA remains committed to working with Government to ensure secure, reliable, and affordable energy
    supply to underpin economic growth and development. We thank the Department for its consideration of
    this letter and will gladly avail ourselves to engage on any of these matters as required.

    Yours sincerely,

    Cas Coovadia
    BUSA CEO

    c/o [email protected]
    Jarredine Morris
    BUSA Energy and Environment Policy Manager

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