PetroSA’s controversial gas deal with Equator Holdings should be terminated
29 April 2024
In January 2024, noting the cloud of controversy surrounding the controversial gas deal between PetroSA and Equator Holdings, the DA warned that Equator Holdings’ owner - Lawrence Mulaudzi, was potentially trying to use the deal for speculative purposes by ‘shopping around’ for funding from anyone willing to invest in the project, and possibly securing a cut for himself.
Four months after we issued this warning, it has now emerged that Muluadzi does not have the money and technical skills to fulfil the tender requirement of rebuilding PetroSA’s critical gas infrastructure and is now ‘shopping around’ for potential funders and technical partners for the project.
The latest development presents irrefutable evidence that the granting of the R21 billion tender to Equator Holdings was irregular as they did not meet the financial and technical requirements specified in the tender call for expressions of interests. For this reason, the tender should be terminated with immediate effect and the circumstances that led to its awarding investigated. If any impropriety is uncovered on the part of those that awarded the tender, they must be held accountable and the law allowed to take its course.
The tender adjudicators at PetroSA failed in their fiduciary duty by either neglecting to conduct due diligence on Mulaudzi or choosing to look the other way despite the glaring red flags. Either way, prima facie evidence exists that PetroSA bent over backwards to ensure that Mulaudzi’s Equator Holdings was awarded the tender.
It now explains why PetroSA flatly ignored a PAIA application that we submitted on their deal with Equator Holdings. Through the application, we wanted PetroSA to provide us with a record of decision that informed the awarding of the tender despite allegations to the effect that the awardee did not meet the tender specifications, had neither proven financial resources to implement the project nor the requisite technical knowledge and experience, and was previously been flagged for improper conduct at the Public and Investment Corporation.
In all this controversy, the Minister of Energy – Gwede Mantashe, has been eerily quiet despite the severe implications that this controversial deal will have on South Africa’s nascent gas sector should Equator be allowed to continue sitting on the tender without doing any work. Mantashe’s indifference lends credence to speculation that Mulaudzi might have been awarded the tender because of his political connections and no one is holding him accountable now because of the same political alliances.
The controversial infrastructure upgrade tender award to Equator Holdings is confirmation that the PetroSA board and the company’s executives have decided to toss out good corporate governance in favor of dubious deals that could expose the organization to corporate capture by discredited individuals.
Issued by Kevin Mileham, DA Shadow Minister of Mineral Resources and Energy, 29 April 2024
