Blame Game Affects Kudu Gas Project

THE war of words over the future of Namibia’s Kudu Gas power plant continued yesterday, with officials blaming the most recent delay on the Ministry of Finance.

Some senior officials leading the negotiations in the Kudu Gas project are blaming the finance ministry for dragging its feet on the finalisation of the support package, in terms of which government would issue guarantees for the multi-million dollar energy project.

“Why is the Ministry of Finance quiet about the support package? The ministry is delaying the project,” said a source close to the government negotiating team.

Efforts to get an official comment from the finance ministry were not successful but a senior official in the ministry rubbished claims that the ministry is delaying the project. The official said all finance did was to assess the financial implications for Treasury.

The allegations of delaying the project were highlighted when former NamPower managing director Leake Hangala claimed two weeks ago that the power project is not viable.

“It is a waste of time and money. Even those people who are spearheading the project know very well that the project is not viable,” he said.

Hangala’s statement was not well-received by the energy ministry’s top officials, who accused him of trying to sabotage the project by going on a public relations spree in order to discredit the energy project that is envisaged to provide a solution to Namibia’s electricity problems.

Ministry officials have also accused permanent secretary of the National Planning Commission Leevi Hungamo of teaming up with Hangala and trade and industry minister Calle Schlettwein, who apparently want to see Kudu Gas fail. Efforts to get comment from Schlettwein were not successful.

“They are waging a public relations war against the project and if they win, this country might be without electricity by 2018. There seems to be people who are not in the energy sector, who want to make their opinions heard,” said a source.

According to those in the know, there apears to be a faction within NamPower that prefers a coal-fired power station instead of Kudu. “That’s why they are going all out to stop Kudu. All the people closest to Kudu believe it can work,” said a source.

Those close to Hungamo said the PS is not against the project but his stance is that Kudu Gas could only be good for the short term and not necessarily for the long term.

Effort to get comment from Hungamo were also not successful but those close to him fear that the government will be left panicking, if the Kudu gas does not kick off as expected.

The Namibian is informed that the heavy campaigning is linked to the extra benefits officials might get when Kudu Gas contracts are dished out, an allegation rejected by one of the government negotiators.

The permanent secretary of mines and energy, Kahijoro Kahuure, said the project will go on as per government’s stance on energy.

He said the Ministry of Finance has committed to funding 44% of NAMCOR’s 54% interest in the project.

The PS said while his ministry respected calls for alternative measures to address energy shortages, such as the establishment of power stations using imported fuel, it is not convinced that this is the most effective solution both from a security of supply and economic point of view.

“It is clear therefore that, tremendous progress has been made by both upstream and downstream partners so far and this is the furthest we have been in the history of the Kudu Gas project,” he said

He said Kudu Gas remains a strategic project for Namibia and has the support of the government.

Kahuure also said that the upstream tenders have been evaluated, and bids extended until 31 January 2015.

He said negotiations with bidders are continuing, with the draft contracts to be concluded upon the finalisation of the gas sales agreement.

Government is reportedly looking at replacing the former partner in Kudu, Tullow, who left last month.

The Kudu fields, 200 kilometres (124 miles) offshore from Oranjemund, hold an estimated 1,3 trillion cubic feet of gas.

The plant will more than double the 400 megawatt of electricity production capacity Namibia has currently.

When completed, this power station will complement the Namibian, Zambian and South African power grids. NamPower will take up 400 MW to be consumed in the country, while 100 MW will go to South Africa and Zambia will take up 300 MW.

Source : The Namibian