PAIA Submitted to obtain record of decision on PetroSA’s controversial gas deal tender award

Dear Editor

The DA has today submitted a PAIA application to PetroSA asking that they provide us with a record of decision that informed the awarding of a tender for the rebuilding of critical gas infrastructure to a bidder who did not meet the tender specifications, has no proven financial resources to implement the project or the requisite technical knowledge and experience, and has previously been flagged for improper conduct at the Public and Investment Corporation (PIC).

According to reports, Lawrence Mulaudzi and his company Equator Holdings were the chosen bidders by PetroSA to refurbish PetroSA’s gas infrastructure – from the deep sea FA platform to various gas pipelines. However, Equator Holdings did not provide evidence that they had the R22 billion needed to finance the deal – which was a prerequisite to win the contract. PetroSA nonetheless went ahead to award them the tender. In addition, Equator holdings has no verifiable track record in the gas industry yet they somehow side-stepped the requirement that ‘…any successful bidder must be an established player’ to be eligible for the tender award.

What is clear is that PetroSA went to extreme lengths to either exempt Mulaudzi’s Equator Holdings from the tender requirements or took a unilateral decision to do everything possible to give the tender to the company at any cost. Either way, the conduct of the PetroSA executives raises questions about how the tender was awarded when there were obvious glaring inconsistences showing that Equator Holdings did not qualify.

Perhaps even more puzzling is whether any due diligence was conducted on Mulaudzi’s background before a decision was taken to award his company the tender. A simple Google search would have alerted PetroSA executives to the fact that Mulaudzi was flagged several times in the report on corruption and malfeasance at the PIC by the Mpati Commission. If this came up in the tender adjudication process, PetroSA must now explain the rationale that informed their decision to award the tender to Mulaudzi’s Equator Holdings despite the issues raised in the Mpati Commission report.

Based on the evidence at hand, it is safe to conclude that PetroSA may have made a predetermined decision to award the tender to Mulaudzi’s Equator Holdings, despite overwhelming evidence that the bidder did not qualify. Secondly, Mulaudzi is now using the tender for speculative purposes to try and see if he can get funding – and secure a cut for himself – from anyone willing to invest into the project. Already, there are reports that he has been courting the Russians for this purpose.

PetroSA has been lurching from one scandal to another, starting with its controversial decision to partner with Russia’s Gazprom bank despite the risk of secondary sanctions involved. 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.

Regards

Kevin Mileham MP
DA Shadow Minister of Mineral Resources and Energy