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Thursday 17 January 2019
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NamPower’s divided powers

nampower

…Can its anchor hold any longer?

•    Plot to sabotage Xaris alleged
•    Board chair denies snitching on colleagues
The spat between members on the NamPower board over national energy projects, especially the notorious Xaris project, is threatening sanity at the power utility, however, the board chairperson denies any divisions. Talks of a squabble between board chair Maria Nakale-Gaomas and some of the other board members could take an unexpected turn after it emerged that the chair and the majority of the board members are sitting on opposite ends of the table when it comes to the much-disputed Xaris project.
Board sources accused the chair of adopting dictator-like tendencies to push through projects in which she allegedly has ‘strong interests’.  Nakale-Gaomas has since been accused of bulldozing board decisions seeing that she openly supports Xaris, despite other board members cautioning that the financial requirements of the project are well beyond the capabilities of the company. So dire is the situation that Mines and Energy Minister, Obeth Kandjoze, had to step in and demand answers. When questioned about the alleged division, Nakale-Gaomas said she did not notice the division among board members regarding the Xaris Power plant. “Perhaps those who see the division are the ones who split from the team and they will be in a better position to respond to that question. Should there be those board members who are not supporting the Xaris power plant they failed to explicitly state as such and express their objections in the boardroom on it, something that they are required to do in terms of good corporate governance practices,” said Nakale-Gaomas when she responded to questions regarding various issues affecting the NamPower board.  She did not deny allegations that she is pro-Xaris. Board members, who spoke on condition of anonymity, said Nakale-Gaomas’ bias towards Xaris could play a major role when it comes to deciding the future of the project. The chair, however, maintains that her views on Xaris are guided by “principle”.
“Every board member has the right to express him or herself on an issue discussed in the boardroom. My views expressed on the Xaris power plant were mainly guided by that principle, just like the views expressed by any other person who attended meetings where the project was discussed,” she said. She added: “Yes, I support the Board’s decision made in September 2014 that identified Xaris as a preferred bidder to build a power plant. Should there be those who do not support the Xaris power plant they have an obligation to convince me why they are against the project, which has gone to the extent of even negotiating several agreements pertaining to its implementation.

She explained that at the time when the idea to procure another power plant in addition to Kudu (was formulated), the plan was to bring Kudu on board in 2018.  “Progress on implementing Kudu has been very slow despite the fact that as an entity we have been and are still spending money on Kudu, an action that demonstrates our willingness to implement the project. Other generation projects were presented to the board and approved as such, and some power purchase agreements have been signed so far,” she said worriedly. NamPower is developing the 800MW (nominal) Kudu Power Station through the KuduPower (Pty) Ltd, a Special Purpose Vehicle (SPV) that was established in 2005. The Kudu Power Station will be located 25km north of Oranjemund. The Kudu Power Station will be the first Combined Cycle Gas Turbine power station of this size in Southern Africa and is expected to be commissioned by end of 2017.

 

Her undying love for Xaris…
She seemed perplexed in her response that she supported the Kudu project in the past yet no one had an issue with her or anyone else supporting it. “I therefore do not understand why someone will have a problem with me supporting Xaris and they did not have any problems when I supported other projects that we implemented or are in the process of implementing. Xaris power plant, just like any other power generation project, came out of an electricity generation planning exercise which NamPower management prepared and submitted to the board for its approval,” she said.  The 250MW power plant, which became the Xaris project, was never initiated by me, but I only got involved after the preferred bidder was identified, she said. “This project is a NamPower project, therefore it is a pity that some individuals find it appropriate to personalise it and allocate it to individuals for reasons only known to themselves. It is sad that an important project like this is used as an accessory for individuals to settle their personal scores with others, while the country’s economic progress is under potential threat due to lack of adequate domestic electricity generation capacity,” she said.
Her sentiments fly in the face of intensified calls for her to be taken to task for insisting on a project that is seen as being out of NamPower’s financial reach while board sources continue to claim victimisation. “I never knew that I am so powerful that I have to dominate the other five board members and unilaterally push for a project. It is every board member’s responsibility to ensure that they articulate their views in the boardroom and convince other members to buy into their ideas. Management also has a responsibility to present cohesive views to the board for its consideration. That is why management and board members are there. Hence, those who feel that I dominated the discussions failed in their duties and only have themselves to blame, and not me,” she said unapologetically. She dared those who question board decisions claiming they were made under duress due to her influence to go to the relevant authority and provide proof thereof.

 

“Why are the aggrieved parties afraid to go to the relevant offices and register their complaints there, instead of running to the media and hiding behind the reporters.
If someone has a legitimate complaint they have an obligation to channel it through the transparent process and let it be resolved objectively under those structures. NamPower has Government as a shareholder who has the right to be informed about the misconducts of any officers including the board members. I cannot be bigger than NamPower.” At its board meeting of 26 July 2016 management was directed by the board to engage the Xaris team and discuss issues of concern that they may have with the project, but that directive was not heeded said Nakale-Gaomas. “I understand that those engagements have not been started as yet despite the fact that the Xaris team attempted to reach out to NamPower. This kind of conduct cannot be accepted and may be viewed as efforts to sabotage the project and cloud out the objectivity expected during the negotiation process,” she said. She called on those tasked with the negotiations to do so in good faith, adding that “the current attitude demonstrated by management further creates doubts whether they will not go to the negotiation table with strategies of making the project not financially viable”. She further attacked ‘people’ playing dirty tactics to stop doing so and instead focus on addressing electricity supply with the seriousness and commitment that it deserves.

 

Plot to settle out of court…
Just before the High Court dismissed an application by Arandis Power, email correspondences have revealed that NamPower considered settling out of court. An email sent by Nakale-Gaomas on 31 May 2016 to then acting MD Simson Haulofu, revealed her proposal for NamPower to settle out of court with Arandis Power. She made this proposal at the time when Arandis Power challenged Government and NamPower’s decision to award a 250 megawatts (MW) power tender to Xaris Energy. The application was dismissed last month because of unreasonable delay. “I was just thinking about our discussion of yesterday regarding the proposal to engage senior counsel on the options available given the court case. Is it also possible to include in our model the option of considering both companies where Arandis [Power] will be given the capacity of 100MW and Xaris 200MW and both plants will be base load,” she said in the email.

 
Asked to explain the email, she said: “My proposal to the Managing Director (MD) at the time was part of the process of finding the solution to the problem at hand.  I requested the MD to deliberate on the issue with his management team and propose other options as well, for recommendation to the Board for its considerations.  I further requested the MD to also discuss that option with the team of legal experts who represented us on the court case of NamPower and Arandis Power and assess whether it is a possible option, and whether it will be in the best interest of the company.” She added: “It was not an instruction to implement, hence my request to rather model it and assess whether it will give us an optimal solution to the generation and supply of electricity, including the element of affordability, otherwise there was no point of even discussing the option with our legal team.”

 

Why I did not sign that letter….
Nakale-Gaomas also explained why she opted not to sign a letter addressed to Kandjoze on 10 June 2016, despite other board members doing so. “My views on the draft letter to Hon. Kandjoze were explicitly shared with other board members at the special board meeting that took place on 6 June 2016.  I also informed other board members at that meeting that I was not going to sign the letter with the view on non-compliance, but will rather write a letter to the Honourable Minister informing him why I did not sign the letter which other board members signed as per his request,” she attempted to explain.
“The letter of the board to Hon. Kandjoze made reference to the non-compliant element of the Xaris bid to the technical requirement of the tender’s RFP. This issue was raised by management at the time when we were responding to the Arandis Power’s supplementary affidavits on the court case that they lodged with the courts regarding our identification of Xaris, as a preferred bidder to build the power plant,” she added. She commented that the unfortunate part is that the ‘key individuals’, who were involved in evaluating this tender, are all suspended and those who formed a view about the non-responsiveness of Xaris’s bid to the RFP claimed not to have been involved in the project.  “I became uncomfortable with a position where someone who claimed not to have been involved in the project having the authority to verbally express a strong opinion on a critical issue like that without providing the documented approach he/she adopted to reach such a conclusion.  The critical stage in the tender evaluation process is for the evaluation team to assess whether the tenderer’s bid is responsive to the RFP or not.” She further indicated that; “I found it appropriate and respectful to rather explain to Hon. Kandjoze why I did not sign the letter, instead of just keeping quiet and letting him wonder why I did not sign it. I do not see anything wrong with myself expressing an objection to the majority board members’ view since this is an acceptable practice during board proceedings.

 
“It is therefore unfortunate that the local tabloid and its informants refer to me as a snitch due to my expression of an objection to a view expressed by others. It is not in my nature to adopt the mob mentality and go with the flow on something I do not believe in, and just because another person supports it, at least not on something as crucial as that.”




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