http://mg.co.za/article/2013-10-25-00-zuma-blood-thickens-hydro-scheme/
Zuma blood thickens hydro scheme
25 OCT 2013 00:00 LIONEL FAULL
President Jacob Zuma's support for a major Mozambique hydroelectric project has created a conflict of interest.
President Jacob Zuma is alleged to have intervened to support a major hydroelectric deal in �Mozambique for which his son, Saady, was a lobbyist.
The viability of the proposed Mphanda Nkuwa hydropower �project has always depended on Eskom signing up to be its main electricity customer.
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No Eskom power purchase agreement, no hydropower dam; that was the stark position the Mozambicans found themselves in 2010, when they first approached Saady Zuma to lobby South African decision-makers.
Lobbyists typically work on a retainer or a success fee, although the details of Saady's arrangements with the Mphanda Nkuwa consortium are not known.
Saady is the older brother of twin siblings Duduzani and Duduzile. They were all born in exile in Mozambique.
Although no power purchase has yet been signed, important questions about potential conflicts of interest remain.
Neither Saady nor his father offered any rebuttals to amaBhungane, despite both being invited to respond to detailed written questions sent over a week ago.
Project representatives
A combination of source testimony and correspondence seen by ama-Bhungane shows that Jacob Zuma not only knew of his son's role in the project, but also met project representatives in spite of the apparent conflict. He also allegedly discussed it with his Mozambican counterpart, President Armando Guebuza, and left others with the impression that he would help to advance the project directly, further correspondence suggests.
The executive ethics code is explicit about conflicts of interest: "Members of the executive should not expose themselves to any situation involving the risk of a conflict between their official responsibilities and their �private interests."
The first meeting allegedly took place at Zuma's official residence in Pretoria in October 2010. According to a source close to the events, Saady brought Celso Correia, the group chairperson of Insitec, the project's Mozambican private partner, to meet his father.
The source claimed Correia had wanted to reassure himself that the "Jacob Zuma" he had been speaking to over the phone and Saady were really who they claimed to be.
Correia, who at 35 is one of Mozambique's most successful businessmen, is believed to be a prot�g� of Guebuza. It is speculated that the Mozambican president has a hidden stake in Insitec, held nominally by Correia.
At the Pretoria meeting, said to have lasted just under an hour, the source said that Zuma assured Correia that his son was "a sober-minded individual".
Correia, the source claimed, came away with the "unequivocal impression" that the president approved of Saady's involvement in the project.
Alleged meeting
But Correia told amaBhungane: "We didn't use any Zuma in developing anything, unfortunately. The project has been stuck for the last five years because we didn't manage to sell the energy. I don't know any Zuma. We never used it [lobbying]."
Despite Correia's denials, it appears Saady's lobbying moved up a gear �following the alleged meeting.
In February 2011, Saady met Eskom chief executive Brian Dames at a presidential golf day in Stellenbosch, after which he sent Dames an email, which begins: "When we met, I did indicate to you that I am a part of the team in the Mpanda Nkuwa Hydro Electric Dam project."
He then outlined an extensive series of meetings held between Eskom and Mphanda Nkuwa representatives since 2008 and pushed for a meeting between Dames and himself.
The Eskom chief executive appears to have initially ignored, then politely rebuffed, Saady's approach.
Eskom said this week that, although Dames had no recollection of meeting Saady at the golf day, it had reviewed his email traffic and had found an email from Saady that Dames had subsequently forwarded to the relevant department for a response.
It said it had also reviewed Dames's diary, which contained no entries pertaining to any appointments with Saady.
"Eskom deals with the Mozambican government, its sister utility [Electricidade de Mo�ambique] and other companies with an interest in this project, not individuals," it said.
Lack of progress
In March 2011, according to internal correspondence seen by amaBhungane, Saady told Mphanda Nkuwa stakeholders his father "was receiving phone calls from Mr G [Guebuza] regarding the lack of progress in this matter".
If the insinuations about Guebuza's hidden stake in Insitec are true, then both presidents were in the astonishing situation of engaging with one another on a project of national interest in which Guebuza and Zuma's son both had a personal interest.
In August 2011, Saady appears to have exchanged SMSes about Mphanda Nkuwa with then energy minister Dipuo Peters, who texted him: "Hi Saady, PPS note that I am still waiting on the info regarding the visit of the Mpanda [sic] Nkuwa developers. Thanks. Dipuo."
A source said Peters also hosted Saady at her home to clarify the government's policy position to him.
A spokesperson for Peters confirmed that she had met Saady, but that this was not out of the ordinary, given that it "was conducted within the realms of her official responsibilities as a �minister of state".
"Minister Peters meets and interacts with various stakeholders, individuals and organised formations alike with regard to issues related to the portfolios she's deployed to at any given time."
In December 2011, a second face-to-face meeting between Jacob Zuma and Correia took place in Maputo during the South African state visit to Mozambique, documentation suggests.
Saady was not present on this occasion, but a close struggle-era connection of the Zuma family on the Mozambican side claims to have played a key role in bringing Correia and Jacob Zuma together once more.
Confirmed
Milva Santos, whose mother accommodated Jacob Zuma in Maputo during the 1970s and 1980s when he was a senior ANC underground operative there, and who refers to Zuma by the sobriquet "Uncle", wrote a brief, but glowing account of the state visit.
"I managed to get Celso a meeting with my uncle and all went well. My uncle made the necessary pressu[r]e for things to move and all is moving at an incredible speed now ..."
And, for a while, things apparently did move speedily.
An Eskom spokesperson confirmed to amaBhungane that, "following a binational meeting between [South Africa] and Mozambique in December 2011, Eskom officials met Mphanda Nkuwa representatives early in 2012 to discuss the latest development in the project � Milva Santos requested the meeting as a member of the Insitec team."
In her account of the state visit, Santos also claimed to have "put Celso and his team and the chief executive of Eskom [Dames] and his team together for a meeting".
Eskom confirmed an encounter, but said it was "done informally during a short break in the formal agenda/proceedings so was not part of the bilateral engagement".
Santos's principal recommendation to Insitec appears to have been her family's enduring ties with Jacob Zuma. Zuma is said to be grateful to Santos's mother for her hospitality during the struggle, and he attended Santos's wedding in Maputo a few years ago as a guest of honour.
Santos's LinkedIn profile indicates a marketing and public relations background, with previous experience at SABMiller Mozambique, the Polana Hotel in Maputo and Coca-Cola. But here she was, brokering two top-level meetings between chief executives and presidents amid a state visit.
Technical issues
Santos asked amaBhungane to send her written questions, but failed to respond.
Eskom officials have held further discussions with their Mphanda Nkuwa counterparts since early 2012, but no power agreement has yet been signed in spite of Saady's role and the backing sources claim he received from his father.
There are many possible reasons for the delay, some technical, some financial and some political.
Eskom officials now say they have ironed out 80% to 90% of the technical issues, particularly regarding a 1500km-long transmission line that would need to be built.
Eskom is keen to minimise its exposure to financial risk, which means that it wants to pay for the electricity in rands.
It also wants to assume no responsibility for transmission failures, which is why it insists on buying the power at the South African border and not at the dam in Mphanda Nkuwa.
Meanwhile, the Mozambican government is rumoured to have lost patience with the Mphanda Nkuwa consortium, particularly its Brazilian construction partners, and is planning to replace them with a Chinese company. Whether the Brazilians will step away, having poured tens of millions of dollars into project feasibility studies, remains to be seen. But any changes would mean further delays to the project.
Correia told amaBhungane that his company would retain a stake in any new consortium, although he sought to downplay the size of a future stake.
The situation remains fluid, but it is possible that Saady may still benefit should the hydropower project eventually go ahead. � Additional reporting by Luis Nhachote
Lionel is a reporter at the Mail & Guardian Centre for Investigative Journalism, Amabhungane.
� Read more from Lionel Faull
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