Emergency power round hits new delay as Karpowership case postponed

The high court in Pretoria on Thursday granted DNG Power a postponement for the hearing of their application to stop the award of energy contracts to Turkish-owned company Karpowership SA.

The case has now been set down from December 8 and effectively means that government’s Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) — intended to provide SA with emergency power — won’t be able to reach financial close until at least the end of December or until judgment.

The financial close deadline has already been postponed once from the end of July to the end of September.

The RMIPPPP was first mooted by government in December 2019 but has faced numerous delays. The objective of the programme was to urgently plug SA’s electricity supply gap and awarded contracts to 11 bidders to supply 2,000MW. Most of the contracts — 1,200MW — went to Karpowership SA.

DNG has alleged corruption, claiming that senior energy officials and a former business associate of the wife of mineral resources and energy minister Gwede Mantashe solicited a bribe, which is why its bid failed. It wants the Karpowership contracts cancelled and awarded to it instead.

Judge Joseph Raulinga said he had carefully weighed the interests of justice, which was in favour of a postponement, and the public interest to relieve the power supply constraint, and decided to grant the postponement. This would however be the final postponement, he said.

DNG, which initially contended that the matter was urgent, is to pay the wasted costs of the postponement application, said Raulinga.

DNG argued in its application that it required more time to gather evidence since the case had been reported to the Hawks and that parliament’s portfolio committee on mineral resources and energy had also commenced an investigation into the RMIPPPP.

The respondents, which include Mantashe and the department’s independent power producer procurement office, argued that DNG came to court without a case and was now asking for time to prepare one.

Raulinga raised the question of whether the Hawks and parliament would have completed their investigations by the end of November, which was the date requested by DNG for the postponement. He however decided on balance to award the postponement.

“This is positive news for DNG, and it will ensure that the court is provided with a full and accurate record of evidence,” said Aldworth Mbalati, group CEO of DNG Energy. “We have faith in our case but requested a postponement on a pragmatic basis when it became clear that direct and material information will come to light from current investigations.

“We believe that the court should have access to that information. Moreover, the outcome of these investigations has the ability to significantly narrow the issues upon which the court has to make a decision.”

patonc@businesslive.co.za