Karpowership slams rival bidder in court papers over corruption allegations

Karpowership SA has fired back at claims that its potential R225-billion power supply deal with Eskom is tainted by corruption.

Explosive allegations were made by DNG Power Holdings, a rival bidder in the government’s Risk Mitigation Independent Power Producer Procurement Programme (RMI4P), in a court application filed last month.

DNG chief executive Aldworth Mbalati alleged that the tender had been manipulated to favour Karpowership, and that he had been the victim of a shakedown by senior government officials and a businessman associated with the Minister of Mineral Resources and Energy, Gwede Mantashe.

The tender was issued and adjudicated by Mantashe’s department, which selected Karpowership as preferred bidder for the lion’s share of 2,000MW to be supplied to Eskom.

But in a 59-page affidavit filed with the Pretoria High Court last week, Karpowership business development director Mehmet Katmer turned the allegations on DNG:

“DNG takes the opportunity of repeatedly making utterances of corruption surrounding the tender process... only because it was not appointed a Preferred Bidder. Yet, on its version it was aware of facts pertaining to this alleged corruption as far back as July 2020 — some 10 months ago — and did nothing until its bid was disqualified.”

In his original affidavit, Mbalati alleged that he was approached by “a businessman with close ties to [Mantashe]” in July last year. The businessman told him the RMI4P tender would soon be released and that DNG “should be assisted by certain undisclosed parties should it wish to be a preferred bidder and ultimately be awarded the tender”. The businessman, he said, offered to “facilitate the relationship”.

Read Powerships: Losing bidder claims ‘blatant corruption’, fingers Mantashe ‘associate’

This was followed, Mbalati said, by a meeting in a Pretoria restaurant in October with two senior officials from the department. One of the officials allegedly asked how he could “help” DNG’s bid, and when Mbalati declined, said: “One thing you must understand is that there is a system in this country and if you don’t work in accordance with that system you will fail, even if your project is the best.”

Mbalati alleged that when Mantashe named the preferred bidders in March, and DNG learnt it had been disqualified, the associate asked him if he had “learned [his] lesson”.

In his answer, Karpowership’s Katmer states: “DNG claims that during these encounters, it was invited to unlawfully collude with state officials and their associates, who had fixed the outcome of the tender. DNG maintains that it refused to engage with these corrupt individuals and, as a consequence, its bid was disqualified. 

“The apparent implication is that the successful bidders, who were appointed Preferred Bidders, accepted the invitation and unlawfully colluded with corrupt state officials. This implication is false, insofar as it relates to Karpowership.”

The main principal’s wife

The most direct evidence Mbalati had put forward to implicate Karpowership was a forwarded SMS that read: “We’ve got some intel from the main principal’[s] wife that our requested extension has been under consideration & they my may afford bidders a three-week delay in submission & it should be announced imminently.”

Mbalati claimed that a representative of Karpowership had approached Mantashe’s wife, Nolwandle, with a request to extend a key deadline, set for 30 October 2020. He further alleged that this had given Karpowership a critical advantage as it knew the extension would be granted whereas other bidders were kept in the dark and rushed to reach the deadline. 

The extension was granted, as the message predicted, but Karpowership has now told the court that it did not take advantage of the extension and filed the required documents on 30 October like everyone else. 

“The date and time of Karpowership’s submission... ought to be recorded in the Department’s online portal’s logbook,” Katmer states.

Without this piece of evidence, DNG may struggle to make the case that the whole tender was tainted by corruption.

Nolwandle Mantashe previously told amaBhungane she did not “have a clue of the extension you are talking about” and had not been approached by anyone about it. Read her full response below.