A joint letter sent to the Independent Power Producer Office (IPP Office) on September 23 by organisations representing local industry, raised several concerns about the prequalification process launched ahead of the inaugural Independent Transmission Project (ITP) procurement programme. In the letter, the Powerline and Substation Association, the Steel and Engineering Industries Federation of Southern Africa and the Manufacturing Circle described the technical and financial criteria included in the request for qualification (RFQ) as onerous, and also not enabling of participation by local industry.

Following the RFQ submission deadline, which was also September 23, the IPP Office confirmed that 17 entities had made submissions to be prequalified to bid to build the 1 164 km of powerlines and 2 630 MVA of transformation capacity across seven corridors allocated to the first phase of the ITP procurement. It is not immediately clear from the responses, however, what role local industry will play in manufacturing the components required for the projects and in building the infrastructure.

Having confirmed receipt of the letter, the IPP Office told Engineering News Editor Terence Creamer that it would be responding to the three organisations, while also stressing that it was committed to ongoing engagements with all ITP stakeholders, including local industry. In addition, it provided responses to several other questions raised about the potential of the ITP programme, together with the larger Transmission Development Plan, to stimulate domestic industrialisation. The questions posed by Engineering News and the responses provided by the IPP Office are outlined below:

Engineering News: Would you agree that the scale of the capital expenditure required on the grid represents an industrialisation opportunity? And could you quantify the opportunity and indicate how the ITP component of that build programme will seek to leverage this potential?

IPP Office: Absolutely, through the country's ten-year electricity grid infrastructure development drive, about R440-billion ($25-billion) of investment is expected to be injected into the South African economy, thus creating a huge industrialisation opportunity for South Africa. It is government's view that by introducing the ITP procurement programme we have an unprecedented and accelerated opportunity to propel South Africa's industrialisation and reignite local manufacturing, localisation and industrial development.

The estimated quantum of the ITP procurement programme's contribution to the overall electricity grid infrastructure investment will be determined as part of the medium- to long-term ITP procurement programme pipeline that will be announced by the Minister next year. It is also worth mentioning that the ten-year electricity grid infrastructure development will enable the addition of 30 GW and 56 GW of new electricity generation capacity by 2030 and 2034, respectively, thus leveraging another industrialisation opportunity in the electricity generation space.

How would you respond to the letter's claim that the technical and financial qualification criteria in the RFQ can be satisfied only by a handful of international companies, with no single South African company likely to qualify?

As this is the first of its kind private procurement programme for South Africa, the first phase of the ITP programme is designed to leverage the experience of developers who have designed and constructed transmission infrastructure projects within the ITP framework. Having regard to the need to ensure that the programme leverages on this past experience, the technical pre-qualification criteria required that any member of the respondent should demonstrate past experience of having undertaken such projects itself or of having contracted either a third party to perform the functions of an engineering, procurement, and construction (EPC) contractor and/or operations maintenance of transmission infrast...