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COSTLY HAND-PICKING

06/05/2016 03:05:00 By Martin Dlamini

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ACCESS to electricity in the country is improving impressively. Equally exciting is to see that the majority of projects under the Regional Development Fund are electricity schemes that have made it affordable for our rural communities to turn the lights on.

The rural landscape is changing into one of luxury mansions towering and lighting up the night against a backdrop of stick and mud huts. At the rate things are going, not long from now, this country will have 100 per cent electrification.

However, parallel to this positive trend is the growing threat of failing to develop a 100 per cent independent power supply to sustain us until doomsday. Our contract with electricity provider Eskom may not be renewed when it expires in the remaining 10 years or less.
There is suddenly a high voltage of urgency to put the lights on permanently in the country’s energy sector. That we failed to take up all the opportunities presented to us decades ago is unforgivable.

Seeing His Majesty the King touring a natural gas electricity generation plant in Mozambique last week brought sad memories of how we blew the chance to have our own gas facility in the country. We do recall that not long after Mozambique discovered natural gas, the proactive minds were quick to seek opportunities. Companies such as Sasol in South Africa were negotiating a gas pipeline from Mozambique to their doorstep.

The mapping of the pipeline was such that it would literally pass by our front doorstep and the Mozambican Government engaged neighbouring Swaziland and offered her a certain quota of the gas supply.

Delightedly we soon got into action preparing all the necessary documentation and legal framework to make this dream opportunity a reality. It is an open secret that Swaziland was eventually left out of this lucrative offer because, instead of putting national interests first, we came up with some piece of legislation that sought to make the sale of gas in the country the monopoly of a certain group of elite businessmen.

This was a government to government initiative, which could have been handled by one of government’s parastatals or at worst a joint venture with a reputable company in the energy sector. What we saw were faces that had no experience in the field but were just privileged businessmen who had access to these great plans who then set out to grab the opportunity. They called it empowerment. A costly blunder that has now literally rendered us beggars.

The natural gas facilities in Muamba, Mozambique have increased electricity production and are now on the verge of exporting beyond South Africa to countries further afield in the region. We were once their regular customers. However, the unit cost of E1.80 has proved too much for the Swaziland Electricity Company (SEC) that sell a E1.20 to local customers so it has suspended purchase of this essential commodity from the Mozambique suppliers. Despite this, the King and delegation haven’t given up on renewing this relationship.

They were engaged in negotiations with their Mozambican counterparts and a memorandum of cooperation on natural resources, water and energy was signed which could (hopefully) pave the way for an affordable price. A gas pipeline to Swaziland would be an even better deal. Sadly though, to build a power generation plant will come a dozen times more than it could have over a decade ago. It wouldn’t have come to this had we not hand-picked individuals or company to do the job.

Proper tendering procedures should have been adopted so that we could end up with a highly professional and sustainable project. That we need several alternative sources of energy – solar, thermal, gas, etc, is a matter of urgency but we cannot afford to repeat the same mistakes.
The thermal power project is another classic case of poor decision making that now has us running in panic. The SEC Chairperson, Stoffen Ginindza, recently counted the costs of failing to initiate the project over six years ago. When the construction of the power station was proposed around 2009 it was E1.2 billion but now it will cost around E12 billion. Not only that, but the coal has also become an undesirable product globally due to its contribution to global warming. We will continue with the project nonetheless, just as South Africa is pursuing its plans to build coal generated power plants to meet domestic demands.
Success of this initiative lies with choosing a professional approach to doing it. Prime Minister Sibusiso Dlamni and some Cabinet members were in India recently to tour a facility owned by JSW group of companies, who are big in the coal and energy sector globally.
They are looking to partner with SEC in the thermal power project. What should be made clear to the public and to potential financiers of the multi-billion project is the transparent selection of the preferred partner otherwise funding may become a challenge for SEC, which could render all those beautiful lights across the country one big dark investment that we can ill-afford.