Is tender design of govt's R400bn energy infrastructure programme deeply flawed?

Government's Independent Transmission Projects (ITP) Programme is an enormously important infrastructure project for South Africa.

It is aimed at unlocking large-scale investment in transmission infrastructure critical for the expansion of the country's electricity grid.

The ITP Programme entails an investment of R400 billion to build 14,000km of transmission lines over the next ten years, as News24's Carol Paton reports.

However, the tender design and its BEE specifications are "a colossal mistake", she charges.

"It aims to pair big global firms with local BEE partners who are not required to have any expertise to be part of the bid", Paton explains.

The local industry, represented by a number of organisations, has held meetings with Electricity Minister Kgosientso Ramokgopa to persuade him to use this opportunity to build South Africa' industrial base, create jobs and stimulate economic growth, she reports.

The Minister's response has been to say that he'll do his best to accommodate their concerns.

In conversation with Stephen Grootes, Kashif Wicomb - president of the Progressive Professions Forum (PPF) and CEO of Adenco Electrical Construction, choes Paton's concerns about an opportunity the country is losing here.

"You must understand that local companies - which would include contractors, consulting engineers and equipment manufacturers - would be the developer-owners of these transmission assets for the first time in their trade history. And this opportunity could give rise to a South African company becoming an international operator and providing that international expertise in another country."

To enable South Africa becoming a global player on the African continent in this sector would require a very small change, Paton says.

"Here's an opportunity to build that capacity and it's not being taken up... This is not a debate about 'we don't want white firms to get more business, it's about the fact that we've got fully empowered black-owned companies that are building power lines, that are building substations, and they're not going to get this opportunity because, politically, the opportunity should go to BEE holding companies."

The Money Show will be reaching out to the Electricity Ministry for comment.

Ramakgopa is set to announce the decision on the preferred bidders on 10 December.

Scroll up to the audio player to listen to the full conversation, and click here to read Carol Paton's detailed report