In a virtual meeting, the Committee discussed the relevant resolutions as it relates to the Kannaland Municipality's decision to enter into a Public-Private Partnership (PPP) agreement to procure renewable energies.
Municipalities in good standing will be allowed to undertake PPP projects. Members suggested the Committee ask National Treasury to give reasons why Kannaland was approved, given the Municipality's financial position.
Kannaland's financial situation is a point of concern. On the other hand the project might also stimulate economic growth and create jobs.
Members also wanted to ascertain if local and Black contractors are involved in the Project.
Other points raised was cost implications for the municipality, its capacity to provide electricity, the socio-economic assessment of the region, scope and technical know-how of the project, concern of the heavy reliance on the service provider, mitigation of risk, tariff agreement and process on unsolicited bids.
The Committee would undertake an oversight visit to the municipality. Although Members expressed concern around the project, this does not mean the project is not supported. Kannaland is very transparent about the project. The Committee has an oversight responsibility and therefore it cannot get involved with governance matters.
Committee Resolutions: Kannaland Local Municipality Solar Power Project
The Chairperson took the Members though the proposed resolutions.
Resolution three to four was submitted by Ms N Nkondlo (ANC).
The resolution is about clarity from the Kannaland Municipality, regarding if there is any involvement by local and Black contractors in the project, according to legislative guidelines on local procurement.
The Chairperson submitted resolutions dealing with cost implications for the Municipality, and the Municipality’s capacity to provide electricity.
The Chairperson took the Members though the proposed resolutions.
The Chairperson made the following proposals which the Committee supported.
- The Committee will ask Kannaland Municipality to furnish the latter with a report detailing if local and Black contractors participated in the project.
- It will ask the Municipality to submit a socio-economic assessment of the region.
Mr A van der Westhuizen (DA) said the heading must be changed from Department of Education.
He said the information provided by the company and the information on the company’s website does not speak to each other. The Committee needs clarity on the scope and technical know-how of the project. It needs the overarching plan behind the Scheme.
The Chairperson took note of Mr van der Westhuizen's comment and said the resolution must be framed in such way it that it calls on the Company and the Municipality to provide sufficient relevant information.
Mr van der Westhuizen replied that he supports Ms Nkondlo's proposal. It is pertinent to request clarity since there are unexplained grey areas. He said he is concerned the Committee might be sidetracked by minute details.
The Chairperson proposed a context sentence be put in the beginning of the resolution. This deals with the concerns raised by Ms Nkondlo and Mr van der Westhuizen.
Ms Nkondlo said she is happy with the proposals.
The Chairperson noted the Committee a sentence will be inserted speaking to the scope of the project, as pertinent questions related to the project were not answered.
On Point 3(b), the Chairperson proposed the statement be converted into a question. She said the question to Kannaland must read:
- If the Municipality can provide information on its fiscal position and the impact thereof on the project
- The Committee also agreed independent must replace sovereignty.
The Members all agreed to the proposal.
On Point 3(c), the Chairperson said, according to her, this point is more a concern than a question.
She said she shares the same concerns as Ms Nkondlo, as many of the responses on the technical aspects came from the Company in question with the Municipality largely silent. It appears as if the Municipality does not grasp the technical aspects of the project.
Mr van der Westhuizen proposed the Committee must express to the Municipality its concerns about the heavy reliance on the service provider, for what he deemed project knowledge.
He suggested the Committee must look at phrasing a question along the lines of how the Municipality will mitigate the risk and protect its own interests.
On Resolution 3(d), the Chairperson proposed rephrasing it as a question along the following lines of:
- What the roles of the national and provincial departments are during and after the project.
On Point 4, the proposal was made for the Committee to request the Municipality to provide additional and all relevant information not yet furnished to the Committee.
The proposal was accepted.
The Chairperson noted the following about her proposed resolutions:
- The process on unsolicited bids must be highlighted.
- The proposed agreement with the investor must include sub-categories dealing with Council resolutions, bid documents, and management decisions.
Mr van der Westhuizen proposed all documents pertaining to the unsolicited bid must be provided to the Committee.
The Members all agreed.
The Chairperson proposed the Committee ask National Treasury (NT) to provide information on the approval process for public-private partnerships (PPP) projects. She would like to see a step by step analysis of this approval process.
Ms Nkondlo replied that NT issued a PPP framework detailing all the relevant information.
Provincial Treasury (PT) indicated it is busy with a review of the PPP framework. She asked the Chairperson to request a copy.
The Chairperson said it is probably better to ask PT for the Framework.
The following was highlighted:
- The Committee resolved to undertake an oversight visit.
Mr van der Westhuizen suggested Kannaland must be asked to explain what its capabilities are regarding electricity distribution and ESKOM's range within the Municipality.
Kannaland must provide the Committee with the tariff agreement.
He also said Kannaland must furnish the Committee with the potential savings the Municipality will achieve.
The Chairperson suggested the Municipality must indicate how much will be saved per kilowatt unit.
Ms Nkondlo said it is also important to determine if the proposed project is appropriate for Kannaland and the value thereof in a broader context.
The Chairperson said Minister Tito Mboweni said Municipalities in good standing will be allowed to undertake PPP projects.
She suggested the Committee ask NT to provide reasons why Kannaland was approved, given the Municipality's financial position.
The Chairperson said she is in two minds about the project. This is based on Kannaland's financial situation. On the other hand the project might also stimulate economic growth and create jobs.
Mr L Mvimbi (ANC) said the Committee must try to play a more hands on role in the project and the Municipality must be assisted.
He took note of the Chairperson's comments. However, he is of the view, even though Kannaland is the smallest municipality, it must still be allowed to attract investment. It might even serve as an example to other municipalities.
The Chairperson replied that Members expressed concerns about the project. This does not mean the project is not supported. Kannaland is very transparent about the project.
The Committee has an oversight responsibility and therefore it cannot get involved with governance matters.
Annual Activities Report
The Committee adopted its Annual Activities Reports.
Minutes of Previous Meetings
The Committee adopted the previous meeting’s minutes.
The meeting was adjourned.
No related documents
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