- BESIPPPP Bid Window 3 is a site-specific procurement round designed to facilitate the procurement of up to 616 Megawatts (MW) from facilities that will provide capacity, energy and ancillary services to NTCSA, as the Buyer, at five (5) specified sites in the Free State Supply Area, therefore only one Preferred Bidder is appointed per site.
The Department received a total of 33 bid responses on 28 November 2024. After the independent evaluation process, the following five (5) Preferred Bidders have been appointed under the Bid Window, representing a total investment of R9.5 billion:
Ramokgopa reported that BESIPPPP BW3 round was highly competitive, with a marked increase in the number of bids relative to the previous bid windows, resulting in a 40% and 8% decrease in the average Evaluation Price, compared to Bid Window 1 and Bid Window 2 prices, respectively.
The five (5) Preferred Bidders have made the following commitments:
- Black Shareholding: will contract at a minimum of 40% in the IPP Project Companies; up to 30% black shareholding by construction contractors; and up to 42% in operations contractors.
- Total Job Opportunities: 852 job opportunities for RSA citizens (measured in job years), during construction and operations.
- Local Content Spend: Over R3.7 billion during construction and during the operation and maintenance phases.
- Preferential Procurement: Over R3 billion from B-BBEE companies, R1.3 billion from BlackOwned Enterprises, R1.1 billion from Qualifying Small Enterprises (QSEs) and Exempted Micro Enterprises (EMEs) as well as R562 million from Black Women.
- Supplier Development, Skills Development, Bursaries for Black Students, Skills Development for Black disabled people, Enterprise Development and Socio-Economic Development initiatives: R184 million over the lifetime of the projects.
In Ramokgopa’s announcement presentation he referred to Mulilo as a local company. Mulilo is majority owned by Danish asset manager Copenhagen Investment Partners.
Allegations of tender rigging
The uMkhonto weSizwe Party (MK Party) has called for full disclosure of bid-adjudication records following the awarding of a R9.5 billion energy tender to Mulilo Energy, a company chaired by former Eskom Chief Operating Officer Jan Oberholzer.
The Ministry of Electricity and Energy has taken note of the letter by the uMkhonto weSizwe (MK) Party regarding the outcome of the Battery Energy Storage Independent Power Producer Procurement Programme (BESIPPPP). The letter raised questions on the integrity of the procurement process and the conduct of certain participants.
The Minister wishes to reaffirm that the procurement process was conducted under the established frameworks of the Independent Power Producer Office (IPPO), guided by the principles of transparency, competitiveness, and value for money. The process was subject to rigorous legal, technical, and financial due diligence, consistent with national legislation and the prescripts of the Constitution of the Republic of South Africa, including the objectives of ensuring that public procurement fosters inclusive growth for previously marginalised communities, including women and youth.
IPPO has been accused of tender rigging in REIPPPP Bid Window 5 where one black empowerment partner was listed in no less than 21 of the 25 projects awarded preferred bidders status. 12 of the 25 failed to reach commercial close. Read more
Ramokgopa explains that since its inception in 2010, the IPPO has undertaken no less than ten bid-windows, attracting R292 billion infrastructure investment in renewable energy projects that reached financial close, with R112 Billion recorded as the actual spent on Broad Based Black Economic Empowerment (BBBEE), representing 74% of the total procurement. The local content spent (actual) reached R81,2 Billion by December 2024.
“The shareholding of Black South Africans has now reached 38.1% with 8.8% held by local communities. Over R4 billion has been invested in socio-economic and enterprise development programmes with over 90,000 employment opportunities created in construction and operation stages,” said Ramokgopa.
One of the biggest criticisms of the IPPO is that they do not conduct follow up audits to determine if project winners have honoured their BBEEE and local content commitments.
The Minister welcomes robust democratic scrutiny and regards public accountability as a cornerstone of good governance. In this spirit, and in full recognition of Parliament’s oversight role, the Minister will formally write to the Chairperson of the Portfolio Committee on Electricity and Energy to request that the Department and the IPPO be granted an opportunity to brief the Committee on the appointment process and respond to any concerns that may be raised by Members of Parliament.
In addressing the allegations put forward by the MK Party, Minister Ramokgopa affirmed the Department’s commitment to integrity, stating, “We remain committed to ensuring that all procurement conducted under the Department’s auspices is beyond reproach and reflects the highest standards of probity and public trust.” He urged any party with concrete evidence of wrongdoing to submit such information through the appropriate legal and institutional channels.
Furthermore, the Minister emphasised government’s willingness to engage constructively with all stakeholders, including political parties, civil society and industry, in strengthening the integrity and developmental impact of South Africa’s energy programmes.
Author: Bryan Groenendaal
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