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DMRE to Specify Procurement Criteria for Risk Mitigation IPP Programme

February 16, 2021

Department of Trade, Industry and Competition

The mineral resources and energy department has been granted permission to specify qualification criteria for procurement that exceed those found in a relevant code of good practice.

The trade, industry and competition department announced the granting of permission in Government Gazette 44157.

Section 9(6) of the Broad-Based Black Economic Empowerment Act empowers the trade, industry and competition minister to permit organs of state or public entities to specify qualification criteria for procurement and other economic activities which exceed those set down in codes of good practice.

Section 10(2) empowers the minister, after consultation with the relevant organ of state or public entity, to exempt the organ of state or public entity from a requirement contained in subsection (1) or allow a deviation therefrom “if particular objectively verifiable facts or circumstances applicable to the organ of state or public entity necessitate an exemption or deviation”.

The permission relates to the department’s Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP).

According to the trade, industry and competition minister, Ebrahim Patel, the mineral resources and energy department, in its application to specify qualification criteria for the RMIPPPP and deviate from the relevant code of good practice, “demonstrated how doing so continues to promote the objectives of the B-BBEE Act specifically and transformation in general”.

Last year, the mineral resources and energy department issued a request for proposals for the RMIPPPP as a direct response to the short-term electricity supply gap as identified in the 2019 Integrated Resource Plan (IRP 2019).

The plan is to procure 2000 MW from a range of energy sources and technologies to be fully operational by not later than the end of June 2022.

The permission to specify qualification criteria is granted for the duration of the RMIPPPP or a 10-year period, whichever is shorter.

The mineral resources and energy department is called upon to “favour bids that exceed the baseline in respect of local content and job creation, particularly where designated groups will benefit through jobs, management positions, and procurement spending”.