Powership company has chequered past  

Nov 21, 2024 News

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 …WPA cites torrent of corruption allegations, court cases 

Kaieteur News- Turkish company Karpowership- that has secured two lucrative contracts from the PPP/C Government appears to have had a troubled past littered with corruption allegations and court cases that have resulted in at least one contract being rescinded.

Citing research on the powership company, the Working People’s Alliance (WPA) questioned whether the government conducted a due diligence check on the company before signing the second agreement between the Guyana Power and Light Company (GPL) and UCC Holdings for the second powership.

At the party’s weekly press conference held on Monday, Co-Leader Dr. David Hinds said that “The project involves two separate contracts under which UCC Holding leases a powership from Karpowership to provide energy to Guyana Power and Light Incorporated, supplying 27% of Guyana’s total electricity demand. Karpowership provides UCC Holding with leasing, operation, and maintenance with an initial capacity of 36 MW for two years.”

Dr. Hinds said that the party’s research revealed that the company has been involved in several controversies in countries it was awarded contracts. The party, “presumes the Government would have prudently done a due diligence on Karpowership to safeguard the public interests. The contrast between the firm’s website view of itself and the torrent of corrupt practices levelled against it is stupendous.”

Adding to the discourse renowned economist and WPA executive member Dr. Clive Thomas highlighted the stark contrast between the company’s self-representation on its website and the numerous allegations of corrupt practices directed against it. He noted that while Karpowership promotes itself as a leader in delivering energy solutions, the troubling accusations paint a far less favourable picture.

“It makes a lot of these posts but when we look at the actual record of that company it is one of the most devastatingly negative portrayers of the behaviour of a company that is involved in a public good like supplying energy to poor states. It (has a presence) on every continent, I was about to say except Latin America but it does operate in Guyana and Cuba but it operates mainly in Europe, Middle East, Asia and lots of countries in Africa about 20 of them,” he said.

Dr. Thomas stressed that any government or anyone who is getting into a serious contract should go through thorough research. He said if such a research was done it   would show that “the company has one of the most distasteful reputations for an energy company in the world. Not only by the type of fuel that it uses, to cause environmental hazards but by the behaviour of the ownership, management and so forth.”

“Every perceivable crime that a multinational can commit they have been accused of and we have a paper which we can make available to any of the people who might want to have it in the audience who are representing the media today, where some of these things are potrayed. It has (a) significant amount of it,” Dr. Thomas said.

However, this is just the icing on the cake, taking a look at daily newspapers of the countries where Karpowership has a presence there are a number of court cases and trials nationally and internationally.

Professor Thomas said that the company’s reputation is known and “every country knows that is the case and what people normally do is to get a due diligence done into the operation of the companies that you are going to deal with, pay for it and there are many consultants around the world who prepare these and sell the data to the government and on that basis the government can make a decision.” He said that it is highly unlikely that the Government of Guyana is unaware of the troubles Karpowership has had.  “So, we are asking therefore that the due diligence studies that they have done be made public because we cannot believe that they haven’t done any and based on the principle, the normal expectation of what a prudent government should do, or would be doing we are asking that they make that available to the public and to WPA. Maybe we can develop a thesis about how we should deal with them upon a more systematic way,” Dr. Thomas explained.

On June 19, 2021 news24.com reported that the Turkish Karadeniz group had faced controversies abroad that call into question the outcome of South Africa’s tender for emergency power in which Karadeniz subsidiary Karpowership SA was named a preferred bidder.  Ama Bhungane and others had questioned the government’s handling of the tender and gave two troubling examples in allegations of bribery raised, involving the Turkish company. The allegations were neither new nor secret, but did not affect the outcome if they were considered as part of doing a due diligence on the bidders.

In Lebanon, Karadeniz is accused of paying commissions to a company linked to politically-connected businessmen. Lebanon’s financial public prosecutor has impounded the two ships it operates in that country as surety for a potential $25-million fine. In Pakistan, a Karadeniz subsidiary stands accused of paying politically-connected middlemen over $5 million to clinch a five-year contract worth $565 million. The deal was rescinded by the country’s Supreme Court in 2012, setting off an epic seven-year legal battle and an ongoing corruption investigation.

In December of last year amabhungane.org reported that former Chief Justice Sandile Ngcobo had eviscerated Karpowership’s Turkish owner over its “biased” and “oppressive” shareholders’ agreement with its black empowerment partners. Powergroup SA turned to arbitration when Turkey’s Karadeniz tried to evict it from the R218-billion deal to supply emergency power to Eskom for the next 20 years.

In February 2023, Karadeniz told Powergroup that it needed to fund its portions of a $5-million (R93-million) the Turkish parent said was needed to get the Karpowership deal over the line. When Powergroup did not deliver the funds, Karadeniz exercised a call option in its shareholders’ agreement that allowed it to seize Powergroup’s 49% for the princely sum of R83M.

(Powership company has chequered past  )

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• Corruption Allegations, Dr. Clive Thomas, powership, Research, WPA

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