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South Africa to Publish Coal Power-Procurement Process This Year


Bloomberg News

Paul Burkhardt

Nov 21, 2014

South Africa plans to publish before the end of the year the process for independent power producers bidding to build new coal-fired generation capacity.

“We are currently finalizing the coal-procurement documents,” the Energy Department said yesterday in an e-mailed reply to questions. “We are expecting the bidders to bid the tariff and provide us with the estimated project cost.”

Africa’s second-biggest economy is struggling with a power grid under strain, leading to controlled blackouts this year. In April, then Minister of Energy Ben Martins announced additional infrastructure projects including 2,500 megawatts of coal-fired power.

“The bidders are expected to raise their own capital for the construction of the plant and Eskom will pay only for the energy produced,” the department said. “We will have sight of the total project cost at bid submission but it is premature to speculate on the price and the project cost at this stage.”

To contact the reporter on this story: Paul Burkhardt in Johannesburg atpburkhardt@bloomberg.net

To contact the editors responsible for this story: Will Kennedy at wkennedy3@bloomberg.netTony Barrett, Alastair Reed

UN documents shed light on African defence procurement


October 12, 2014

Tanzania’s Type 07PA 120 mm self-propelled mortars were seen for the first time in a 26 April parade. China’s submission to the UNODA says it supplied 12 large calibre artillery systems to Tanzania in 2013. Source: IHS/Ping Zhang

The UN Office for Disarmament Affairs (UNODA) recently released two documents that provide additional details of African defence procurement in 2013, including the numbers for some of the acquisitions that countries are known to have made that year.

For example, China said it had supplied 11 unidentified armoured combat vehicles and 12 large calibre artillery systems to Cameroon. This is probably a reference to the Type 07P infantry fighting vehicles (IFVs) and PTL-07 tank destroyers with 105 mm guns that were paraded for the first time on 20 May.

Similarly, China said it had supplied 24 new tanks and 12 large calibre artillery systems to Tanzania. The Tanzania People’s Defence Force paraded Type 63A light amphibious tanks and 120 mm Type 07PA self-propelled mortar systems for the first time on 26 April.

China also said it transferred 30 unidentified tanks to Chad. This suggests the tanks seen on transporters in the Chadian parade in August were not its old T-55s, but newly acquired Type 59s.

Belarus confirmed to the UN that it sold four Su-24M supersonic attack aircraft to Sudan, as well as four Mi-24 assault helicopters, but no additional Su-25s as claimed by the source that revealed the Su-24 sale.

Sudan also bought more armour from Ukraine, namely 20 T-72 tanks, 20 BMP-1 IFVs, and five 2S1 Gvozdika self-propelled guns. It is unclear if the T-72s were exported as kits to be assembled in Sudan as the Al-Zubair tank. Ukraine also sold five 122 mm D-30 howitzers to Sudan.

Having delivered 99 T-72s to Ethiopia in 2012, Ukraine transferred another 29 in 2013. Ukrainian state arms exporter Ukrspecexport announced in June 2011 that the company had signed a USD100 million deal to supply 200 surplus T-72s to Ethiopia. It is unclear if the first deliveries were made in 2011 as Ukraine did not submit any information to the UNODA that year.

Ethiopia also acquired 12 surplus Mi-24 helicopters from Ukraine and 12 MiG-23 jets from Bulgaria. Described as “dismantled, expired lifespan, without armament”, the MiG-23s were presumably acquired so they could be cannibalised to keep Ethiopia’s existing fleet flying.

Bulgaria confirmed that it supplied the 152 mm D-30 howitzers that were seen in a parade by the Armed Forces of the Democratic Republic of the Congo in July.

Most of Russia’s defence exports to Africa went to Algeria, which acquired 101 tanks and 10 armoured combat vehicles. Algeria is reportedly in the process of acquiring a second batch of T-90S tanks from Russia to bring its total fleet up to 305 vehicles.

The only other African export listed in the Russian submission to the UNODA was for four combat helicopters delivered to Ghana: an apparent reference to the Mi-171Sh aircraft it received that year.

Mozambique, meanwhile, appears to have received its first tracked vehicles in 2013. The UK said it exported 40 F430 armoured combat vehicles to the country: probably a reference to surplus British Army vehicles from the FV430 family. The UK also delivered 20 old Saxon wheeled armoured personnel carriers to Mozambique.

Rwanda, meanwhile, acquired just one FV430 from the UK.

South Africa: Government to Decide On Nuclear Procurement Process


allAfrica.com

October 1, 2014

Pretoria — The Department of Energy on Wednesday announced that government will decide on which procurement method will be used to acquire 9 600MW of nuclear power.

“… There will be a procurement process and the work that the department is doing is preparation towards that procurement process,” Deputy Director General (DDG) for Nuclear Energy at the Department of Energy, Zizamele Mbambo, said.

South Africa recently signed an Intergovernmental Agreement on Strategic Partnership and Cooperation in Nuclear Energy and Industry with Russia.

The agreement lays the foundation for the large-scale nuclear power plants (NPP) procurement and development programme of South Africa. This will be based on the construction of new nuclear power plants in SA with Russian VVER reactors, with total installed capacity of up to 9.6 GW (up to 8 NPP units).

At Wednesday’s briefing, the department said it is currently doing work in preparation towards the procurement process.

“We’ve highlighted that various models exist in the international space of the procurement process and South Africa would review all this and choose whichever procurement process it chooses to implement the nuclear programme. That decision will be made in the future,” said Mbambo.

Internationally, various procurement models are used and these are informed by the way in which countries want to roll out their nuclear programmes.

“This will apply to SA as well. Government will make a decision and say what is our national interest in rolling out this process,” said Mbambo, adding that the procurement process has not started.

South Africa has a number of nuclear agreements with several countries, including Russia and the US. SA is set to sign an agreement with France this month.

The department’s Acting Director General, Dr Wolsey Barnard, said that no information relevant to the public about South Africa’s nuclear build will be withheld.

South Africa’s nuclear energy policy was approved in 2008 and was further enhanced by the approval of the Integrated Resource Plan (IRP) 2010 – 2030, which stipulates that nuclear power will form part of the country’s energy mix to a level of 9 600MW.

“Some of the key elements of the policy revolve around the fact that as South Africa, we want to be self-sufficient. We want to be able to exploit nuclear technology for peaceful use purposes. Currently, people are focusing on the 9 600MW, which is mainly for the generation of electricity. But if you look into the process, the entire programme involves training, skills development and job creation [among others],” said Mbambo.

South Africa is looking at the entire nuclear energy value chain.

On how long will the procurement process take, Mbambo said that this will depend on the type of model that government approves.

He said the aim of the procurement process is to put the country on a path where there is energy security and to reduce greenhouse gas emissions, among others.

To date, South Africa generates 5% of its electricity from nuclear power through the Koeberg Nuclear Power Plant in the Western Cape.

At the centre of the new nuclear build programme will be a concerted localisation plan that will ensure that existing South African industry participates to the maximum extent.

The department said government is committed to ensuring that the new nuclear build programme is undertaken in a fair, competitive and cost effective manner.

– SAnews.gov.za

South Africa Signs Agreement With Russia for Nuclear Power


Bloomberg News

Paul Burkhardt

September 22, 2014

South Africa signed a partnership agreement with Russia’s state-owned nuclear company that may see Rosatom Corp. build reactors in Africa’s second-biggest economy.

“The agreement lays the foundation for the large-scale nuclear power plants procurement and development program” using Russian VVER reactors with installed capacity of about 9,600 megawatts, or as many as eight nuclear units, Rosatom and the South African government said in an e-mailed statement today. The country also has a draft nuclear cooperation pact with China.

South Africa’s integrated resources plan envisions 9,600 megawatts of nuclear energy being added to the national grid to help reduce reliance on coal, which utility Eskom Holdings SOC Ltd. uses to generate 80 percent of the country’s electricity. The state-owned company is struggling to meet power demand,

The National Treasury said in February 2013 that a 300 billion-rand ($27 billion) nuclear program was in the final stages of study.

Areva SA (AREVA), EDF SA (EDF), Toshiba Corp. (6502)’s Westinghouse Electric Corp., China Guangdong Nuclear Power Holding Corp., Rosatom and Korea Electric Power Corp. (015760) have expressed interest in building the plants.

Local Procurement

“This agreement opens up the door for South Africa to access Russian technologies, funding, infrastructure, and provides a proper and solid platform for future extensive collaboration,” South African Energy Minister Tina Joemat-Pettersson said in the statement. It will allow the country to implement its plan to create more nuclear capacity by 2030, she said.

The collaboration will result in orders worth at least $10 billion to local industrial companies, Rosatom Director General Sergei Kirienko said in the statement.

In addition to building the nuclear units, the agreement provides for partnerships including the construction of a Russian technology-based research reactor, assistance in the development of South African nuclear infrastructure and education of specialists at Russian universities, the parties said in the statement.

Rosatom currently holds projects for the construction of 29 nuclear power plants, including 19 foreign commissions in countries including India, China, Turkey, Vietnam, Finland and Hungary.

Financial Implications

Eskom operates a 1,800-megawatt nuclear facility at Koeberg, near Cape Town. In December, the Energy Ministry published a revised 20-year energy plan, which projected that new nuclear power won’t be required until at least 2025.

If finalized, the deal may have significant financial risks and implications for electricity prices in South Africa, said Anne Fruhauf, an analyst at New York-based consultants Teneo Intelligence.

South Africa’s energy regulator last month approved a power-tariff increase that could amount to 5 percentage points on top of the above-inflation 8 percent previously agreed, and prices may have to rise even further for Eskom, which supplies 95 percent of the country’s electricity needs, to plug a 225 billion-rand funding gap.

“The million-dollar question will be the financing details and equity ownership,” Fruhauf said in an e-mailed response to questions. “We don’t have the details yet but it could be one of the biggest public procurement programs on which South Africa has ever embarked.”

To contact the reporter on this story: Paul Burkhardt in Johannesburg atpburkhardt@bloomberg.net

To contact the editors responsible for this story: Will Kennedy at wkennedy3@bloomberg.netAna Monteiro, John Bowker

How cars and smartphones ‘inflated’ Huawei’s NetOne Zimbabwe


ITWebAfrica

By Gareth van Zyl

Cars, smartphones and solar powered cell towers were among items that inflated an initial price tag of Chinese telecommunications equipment firm Huawei’s controversial network upgrade deal for Zimbabwean state-owned mobile operator NetOne.

This is according to documents a source has provided to ITWeb Africa regarding the network upgrade deal, which is facing a court case in Harare amid allegations that the over $200 million contract was awarded illegally.

Zimbabwean-born Tafadzwa Muguti, who lives in South Africa, has taken NetOne, Zimbabwe’s State Procurement Board (SPB), Huawei and the Anti-Corruption Commission of Zimbabwe to Harare’s administrative court over the awarding of the $200 million contract.

The businessman, who is the chief executive officer of investment group Africapaciti, wants to find out how Huawei won the NetOne contract, even though the Chinese company did not go through an official tender process.

Because NetOne is a state-owned entity, it is obliged to adhere to Zimbabwe’s procurement laws with regard to the awarding of contracts, Muguti has argued.

Muguti also alleges the contract was awarded to Huawei despite Zimbabwe’s SPB having expressed concerns over an inflated price for the project. The SPB is the first respondent in Muguti’s court case.

And documents detailing the record of proceedings regarding the awarding of the deal, which are in the hands of ITWeb Africa, illustrate the SPB’s initial concerns about the Huawei deal.

In a July 2013 letter from NetOne to the SPB, in which the mobile operator addresses concerns about the Huawei deal to the SPB, an amount of $298.6 million is quoted for the upgrade, which hinged on a loan from China’s Exim Bank.

That figure was then dropped to $251 million, according to the documents, and ultimately — as the documents later reveal — this figure was cut to $218 million.

NetOne officials, in the document, argued that only Huawei could carry out the upgrade deal as the mobile network’s infrastructure is from the Chinese telecommunications firm.

But the State Procurement Board then raised the following issues, which are summarised below:

  • “Members noted with concern that the Secretariat had failed to properly analyse the matter for logical presentation to the board.”
  • “The presentation was jumbled up and comprised of disparate requirements including Upgrades, New Equipment and Construction of a Building.”
  • “The matter was also hastily presented as an urgent item without adequate background and factual information.”
  • “Background was inadequate and lazy.”
  • “There was no clear justification why the current requirements should not go to tender, in light of the unclear relationships between the projects.”

The documents reveal that on 27 June 2013, the State Procurement Board deferred the pending of the contract to await further input.

The board also raised concerns about “the procurement of smartphones and tablets for resale to the public, which are not part of the network upgrade.”

Furthermore, the documents also highlight concerns that Huawei had quoted inflated prices for equipment that may not help with a widespread upgrade to next generation LTE.

Items that the deal was initially planned to include were as follows, according to the record of proceedings:

  • Purchase of 1336 2.75G base stations
  • Purchase of 600 3G base stations
  • Purchase of 400 4G base station
  • Supply of 500 diesel generators to serve as stand-by power at base station sites

NetOne in the documentation does argue that Huawei has quoted it at a lower price for base stations at $170,000 rather than the market price of $180,000.

In the documents, the Zimbabwe’s ministry for transport, communications and infrastructure development, did write to the SPB calling for the upgrade to be given to Huawei.

The ministry argued the deal could help NetOne boost its services, subscriber base and contribute to Zimbabwe’s ICT development.

But a letter from the Transport department then outlines how the project had been scaled down.

“Some of the key components that have either been scaled down or removed as a result, include Base station Towers that have been reduced by half, removal of four wheel drive vehicles for project implementation and maintenance, solar powered Base Stations that were meant to serve as coverage gap fillers, the online charge system, where NetOne will later have to expand the existing system to meet the increased subscribers to be connected,” says the letter.

The response goes on to allay fears regarding the number of 4G stations, as the Transport department said that these would be deployed in highly dense urban areas to cater for demand.

The Huawei-NetOne contract, though, was publicly announced in July while deliberations continued in the background.

And in that same month, concerns about the deal were communicated from the State Procurement Board in a record of proceedings.

Among these included:

  • “Members noted that there were allegations of overpricing some aspects of the project components.”
  • “Members noted with concern that according to the minute from the Secretary for Transport, Communications and Infrastructure Development to Treasury dated June 19, 2013, NetOne and Huawei Technologies of China had already signed a contract for the Works without authority.”

A board resolution on the 18th of July then further deferred the matter.

Further reading into the documents also reveals that the Post & Telecommunications Regulatory Authority of Zimbabwe but that concerns existed that the watchdog had not consulted the relevant industry experts.

The contract price in the documents goes down then to $218 million, while reports in July talk of a deal that was just over $200 million

Court case postponed

Subsequently, on 19 November, Tafadzwa Muguti’s court case against the relevant parties was postponed.

However, in court documents, the SPB has outline that it did finally approve the Huawei deal, despite its concerns outlined in the record of proceedings.

The board then further highlights how it consulted advice from three government ministries and telecommunication and IT engineers.

The board goes on to say in court papers that the urgency of the upgrade drove its decision.

As a result, the board asked that the court reject Muguti’s appeal as “frivolous and vexatious.”

The board also then asks that the court finds that its decision was “prudent and feasible.”

Finally, the board asks that the court throws out the appeal with costs for a lack of merit.

Huawei responds

Chinese telecommunications equipment firm, Huawei, meanwhile has also denied alleged corruption regarding the deal.

“For the project with NetOne, we strictly abide by all procurement laws and regulations in Zimbabwe, our target is to help Zimbabwe people enjoy their life through communication at affordable price,” Jacky Zhang, who works with Huawei Technologies Zambia but manages communications for Zimbabwe, told ITWeb Africa.

“The allegation for over-inflated is not base on the truth,” Zhang told ITWeb Africa.

ITWeb Africa also asked NetOne for comment, but the company has not responded to emails.

Ugandan government suspends 58 suppliers


Supply Management

28 November 2013 | Will Green

The Ugandan government has published a list of 58 suppliers who have been suspended from bidding for public contracts.

The Public Procurement and Disposal of Public Assets Authority (PPDA) has suspended the firms for a range of reasons including submitting forged bid securities, works not completed on time and invoicing for work not carried out.

The suspensions range in duration from one to five years.

Among the firms is Amman Industrial Tools & Equipment Ltd, which has been suspended indefinitely for causing a $1.7 million loss to the government in connection with a contract to provide 70,000 bicycles.

In a statement the PPDA said: “The firms and their directors will no longer be allowed to participate in any public procurement process during the duration of their suspension.

“Some firms like Amman Industrial Tools & Equipment Ltd and their directors have been suspended indefinitely for causing $1.7 million financial loss to the Government of Uganda.”

A full list of the suspended providers can be found here.

 

Paramount Group acquires Nautic Africa


www.defenceweb.com

Written by Dean Wingrin, Friday, 08 November 2013

Paramount Group, Africa’s largest privately owned defence and aerospace company, has acquired a majority stake in Cape Town-based specialist ship building company Nautic Africa.

Nautic Africa, started by CEO James Fisher, was established in 2008 and is a provider of speciality high-speed, ballistic protected aluminium patrol vessels, mainly to the military, Coast Guard and oil and gas communities.

Whilst the Paramount Group has its roots in the land forces environment, it recently moved into the aerospace sector with the acquisition of ATE (Advanced Technology and Engineering, now Paramount Advanced Technologies) early this year.

Ivor Ichikowitz, Executive Chairman of Paramount Group, noted his company had been looking to move into the maritime arena and that starting from scratch was not viable. “The acquisition of Nautic Africa,” Ichikowitz explained, “is the last piece of the puzzle to supply customers with complete solutions in the maritime environment.”

Ichikowitz observed that one of the biggest threats facing Africa is not coming from the land or the air, but from the sea in the form of piracy, theft of marine resources and drug trafficking.

The deal to acquire Nautic Africa was put together in early 2013, but the formal announcement was only made at a ceremony at the Nautic Africa facility in Table Bay Harbour on Thursday. Fisher will retain a significant minority interest in the company. It is envisaged Nautic’s current workforce of 100 will double to 200 by 2015.

The acquisition, Ichikowitz said, will combine Paramount’s global market reach and strong track record in Africa with the engineering and design skills of Nautic Africa. This, he continued, will stimulate global demand for Africa’s naval solutions.

Fisher noted that Paramount would bring strength to Nautic Africa. “It brings us pedigree, they will assist in growing to the next step,” said.

Importantly, the ship builder will be able to leverage off Paramount to strengthen their systems and administrative support, as well as gaining access to markets they could not easily access before.

Nautic Africa recently concluded an R600 million deal to build seven 35 metre multi-role patrol vessels for West African clients and is actively working on new orders. The acquisition will further create jobs in the maritime industry as well as the general defence and systems industry.

Due to the growth of the company, Nautic Africa is not only looking to expand its dockyard and ship building facilities in Table Bay Harbour, but may also create a new facility at Saldanha Bay.

The South African Navy (SAN) has expressed a desire for a strong local maritime industry and Fisher is interested in pursuing relationships with the SAN. In order to grow its capabilities, Nautic Africa have partnered with DCNS of France for Project Biro, the acquisition of Offshore Patrol Vessels (OPV). Austal of Australia has also expressed interest in partnering with the Cape company.

Besides the actual building of vessels, Nautic Africa is also looking to growing its leasing business.

As a result of the acquisition, a two brand strategy has been implemented. The Nautic Africa brand will continue to be used for commercial activities, whilst military markets will use the new Paramount Naval Systems brand.

Ex-Clinton aide wins court ruling against African country


Thehill.com

By Kevin Bogardus – 08/26/13 06:12 PM ET

A U.S. court has ruled that the Republic of Equatorial Guinea must pay Lanny Davis, who served as special counsel to former President Clinton, more than $158,000.

In an opinion signed Monday, U.S. District Judge Rudolph Contreras awarded the sum to his firm, Lanny J. Davis & Associates, for his “unreimbursed out-of-pocket expenses” owed by the tiny African country.

In 2010, Davis entered into a joint contract with his then-law firm McDermott Will & Emery to represent Equatorial Guinea. Under the more than $2 million contract, Davis and others were to embark on “a comprehensive reform program” for the oil-rich nation, according to Justice records.

Equatorial Guinea has not been a shining beacon of democracy.

President Teodoro Obiang Nguema Mbasogo seized power in 1979 through a military coup. The country has been beset by allegations of human rights violations, and Obiang’s son was the subject of a probe by the Senate Permanent Subcommittee on Investigations for moving millions of dollars through the United States.

In October 2011, Davis filed a complaint against the country for breaching their contract by not paying back his expenses. Davis noted that he traveled several times to Africa, wrote a speech for Obiang and worked with senior State Department officials and the U.S. ambassador to Equatorial Guinea on behalf of the country.

Equatorial Guinea did not respond to Davis’s complaint in court.

Mark Zaid, an attorney representing Davis, said the large sum of money awarded is to pay back Davis for expenses he accrued while representing Equatorial Guinea that the country didn’t reimburse.

“This will cover out-of-pocket expenses that Lanny spent while representing Equatorial Guinea and trying to bring them into law and democracy, for things like airfare and other travel expenses. It also covers interest on the underlying debt for the past two years from the unpaid bills,” Zaid said.

Davis came under criticism for representing Equatorial Guinea, but Zaid said Davis was working to reform the country.

“He [Davis] was hired to persuade the country to act more democratic, to open up its relations with the United States. The job was to bring established democracy to the people of Equatorial Guinea. Unfortunately, the country not only turned its back on that effort but stiffed Lanny in the process for those out-of-pocket expenses,” Zaid said.

Zaid said they will pursue the country’s assets here in the United States in order to recoup Davis’s expenses.

“We will be going around the country and trying grab Equatorial Guinea’s assets here in the United States to pay back this judgment. Eventually, we will get it,” Zaid said.

Rwanda: 300 Awarded Certificates in Procurement Courses


AllAfrica.com

By Sarah Kwihangana

September 28, 2012

The School of Finance and Banking (SFB) has awarded certificates to over 300 students who have completed training in professional procurement courses.

The 2nd certificate awarding ceremony was held yesterday in Kigali under the theme “Twinning arrangement to develop capacity in procurement for Rwanda.”

The director general, Rwanda Public Procurement Authority (RPPA), Augustus Seminega said that training in professional short courses in procurement is in line with government’s plan to ensure good public procurement practices through skilled manpower.

“Initially, we had no institution offering such courses. I am happy that now our procurement officers can undertake such trainings here in Rwanda and, in turn, our employees acquire more skills,” Seminega said, adding that he was optimistic that the graduands will contribute to good practices to public procurement.

He called on the students to implement what they had learnt and also encourage their colleagues in the same field to pursue such professional courses. He further called for more people to take on these courses since there is still a wide skills gap especially in public institutions.

SFB acting rector Papias Musafiri Malimba underlined the need to create a critical capacity building in the field of procurement as it still lacks skilled professionals.

He appealed to employers to facilitate their employees to acquire such skills and called on the graduates to study all the seven modules of the professional procurement courses.

Jean Pierre Munyabugingo, a procurement consultant and one of the graduates who was also awarded a certificate of trainer, said he had acquired a lot of knowledge in the four courses he had studied under the program.

“I did a course in training of trainers, procurement for good, works and services. These courses are very practical and the knowledge I acquired is going to help me perfect my work. As a trainer I will definitely assist people and organisations where there is a need.”

Peace Asiimwe, an accountant with RPPA, received a certificate in project management and procurement planning. She says it was additional knowledge as an accountant.

“This course has broadened my understanding of procurement practices and processes. I have learnt about the laws and regulations, the process of getting a tender among other things which I intend to put in practice.” Asiimwe said.

Various students received certificates in different fields of; project management and planning, procurement for goods, works, services, audit, and logistics, advanced contract management, and of these seven were awarded certificates for training of trainers.

A law is in the pipeline to put in place an institution in charge of accrediting procurement officers in the country in a bid to enhance professionalism.

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