120 MegaWatt stop-gap plant deemed overpriced
Consumer Advocacy for Electricity spokesperson and professional engineer Peter Nutt and entrepreneur Ezio Vernetti in conversation with the Economist have suggested that NamPower’s interim 120 megawatt plant is expensive.
The Economist was able to speak to the two individuals on separate occasions last week when the Electricity Control Board presented a review of the National Integrated Resource Plan in the capital to its stakeholders. Vernetti, whose Natura Energy will be bidding for the tender said, “the fact that we are working on the tender shows that it is over-priced. We work with experts on these things everyday.”
Nutt on his part reiterated Vernetti’s claim and said, “it’s true that this electricity is going to be expensive. The tariff for this power station will be between N$6 and N$9/kWh unless an ageing and second hand plant is used.
“Where the average bulk tariff is currently around N$1.40/kWh and South Africa N$ 0.7/kWh, salient questions arise, for instance, will the consumer be paying for it directly or through state subsidies? Is the principle of cost reflectivity applicable? Is the Minister of Finance in the know? What is the real motive behind this tender?” Nutt asked.
According to Nutt, NamPower hosted what was labelled an unofficial tender clarification meeting in Walvis Bay on 20 November. Prospective bidders were offered instead the opportunity to submit written clarification questions by 30 November.
NamPower assured the delegates that the combined set of written answers would be provided to every registered bidder by 1 December. By the end of office hours on 3 December 2015, no such written clarifications were available, Nutt explained, despite the fact that the tender closes this Friday 11 December 2015.
“Given the facts of the situation, is there a preferred bidder with prior knowledge; or who had prior opportunity to prepare a competent bid that can be submitted in such a short time after tender clarification?” It is beyond normal tender practices,” he charged.
Further questioning pertained to anticipated tariffs foreseen in the next three to five years, as well as whether NamPower, the Ministry of Mines and Energy and or prospective bidders will provide a standard tariff template.
Participants at the National Integrated Resource Plan review asked whether the proposed 120 MW plant would serve its purpose as a stop-gap measure against impending load-shedding anticipated for 2017.