On July 23 the Mail & Guardian published a story alleging that Lillian Naicker, of the company Waste Rite, had been given prior access to details of a tender issued formally only some six months later by the City of Johannesburg in March 2007.
Naicker, part of a consortium called Ener-G Systems Joburg, did not respond to this allegation at the time.
However, the M&G was not aware that she was a minority shareholder in the consortium and the M&G did not give an opportunity to Ener-G Systems, the lead partner, to deal with the claims.
Ener-G has emphasised that it had no knowledge of these allegations and received no access to the tender specifications prior to the official issuing of the tender documents for the city’s landfill gas project, neither from Naicker nor anyone else.
The tender was to provide solutions for the collection and utilisation of methane gas produced by the city’s five main landfill waste dump sites.
Ener-G has also provided the M&G with an affidavit sworn by Naicker on August 19 this year in which she denies receiving any such information.
Naicker states: “I … solemnly declare that at no time prior to the publication of the landfill gas tender (tender A206) did I, or the company I represent, receive any proprietary information or details and/or documents of any nature from the city or any of its representatives.”
Ener-G director Dave Cornish added that Naicker’s company held only a 10% share in the Jo’burg consortium and that Naicker was not involved in the day-to-day running of the business.
Ener-G Systems has a 51% share, while the state-owned Central Energy Fund has a 29% share. Another empowerment company, Likusasa Energy Africa, also has 10%, alongside Waste Rite.
Both Ener-G and the City of Johannesburg have pointed out that the story’s description of the opportunity as “a R500-million tender” may have been misleading.
Cornish said that, in fact, the project will not cost the city a cent.
His consortium will take all the risks and provide all the funding to set up systems to collect and pipe the gas and feed it to run specially designed engines on each site. The company has already invested some R15-million in development costs.
The engines will power generators that will sell electricity into the national grid, earning the company revenue.
Because of the fact that the methane will escape into the atmosphere if not trapped and burned, the project will also earn and sell carbon credits under the Kyoto Protocol to mitigate climate change.
Burning methane is environmentally desirable as it is far more harmful as a greenhouse gas than the resulting carbon dioxide.The Ener-G tender also makes provision for the city to gain a share in any profits flowing from the project.
Cornish said the skills and technologies to manage the process are highly specialised as the gas produced from the decomposition of municipal waste is of varying quality and contains many impurities, some of them highly corrosive to normal engines.
“We’ve been in industrial energy for about 25 years. This was not a simple sort of tender, but called for investment, project development and technical solutions.
“The city, which was also represented by an independent transaction adviser, chose us for our expertise,” he said.
The company runs a similar plant at the Alton landfill site at Richards Bay in KwaZulu-Natal, which is already feeding electricity to BHP Billiton”s Hillside aluminium smelter.
This article was produced by amaBhungane, investigators of the M&G Centre for Investigative Journalism, a non-profit initiative to enhance capacity for investigative journalism in the public interest. www.amabhungane.co.za.
