LUNGILE MASHELE: Socioeconomic spending by IPPs needs a revamp
Development programmes based on a handout model risk collapse as power projects end
In 2011 Eskom launched its supplier development and localisation unit. The purpose was for Eskom to use its vast procurement spend at the height of the new build programme to entrench local economic development, local manufacturing, black ownership, and the participation of women, youth and people living with disabilities in procurement value chains. What began with a noble and justified intention went awry as suppliers inflated prices and corruption entrenched itself.
Independent power producers (IPPs), as part of the Renewable Energy IPP Programme (REIPPP), must spend 1% of annual revenue on socioeconomic development (SED) initiatives. Most IPPs manage to spend 2%-3% easily. This has resulted in R3bn being spent on SED and enterprise development initiatives since the inception of REIPPP, and funds were allocated to education and skills development, social welfare, healthcare and agriculture...
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