A key obstacle to an emergency program to supply 2,000 megawatts of power to South Africa\u2019s grid has been removed with the dismissal of a legal challenge to the process by a losing bidder.<\/p>\n
DNG Energy, which was seeking to supply power from gas-fired plants, had its application to halt the process dismissed and was ordered to pay legal costs, according to a judgment distributed by South Africa\u2019s High Court on Sunday.<\/p>\n
DNG had alleged that corruption involving government officials had led to Turkey\u2019s Karpowership, which supplies electricity from gas-fired plants on ships, winning the bulk of the emergency power contract. The government countered that DNG\u2019s bids didn\u2019t meet its requirements and rejected the allegations made against it.<\/p>\n
“The demonstrable reason for DNG\u2019s unsuccessful bids was because it failed to meet a myriad of qualification criteria,” Judge Joseph Raulinga said in his judgment. The company also submitted additional documents without getting the correct permission from the court, he said.<\/p>\n
DNG had demanded that its bids replace those of Karpowership.<\/p>\n
“I believed in the merits of our case and we will study the judgment,” DNG Chief Executive Officer Aldworth Mbalati said in an interview. “If we believe there are merits for an appeal we will appeal.”<\/p>\n
The judgment brings to an end a legal saga that had stopped Karpowership and other successful bidders including Scatec ASA, Acwa Power Co. and Electricite de France SA from concluding financing arrangements with banks on their projects.<\/p>\n
Still, while the first contracts were awarded in March 2021 and power was expected to be supplied by August this year, the delays caused by the lawsuit mean that deadline is now likely to be missed.<\/p>\n
That could prolong the intermittent power outages that South Africans have been experiencing for more than a decade because the state power utility Eskom can\u2019t meet demand. Those outages hit a record last year.<\/p>\n
While the government-imposed deadline for concluding the financing arrangements was set for Monday, it has now been extended until the end of March.<\/p>\n
Karpowership, which won the rights to supply 1,220 megawatts of power for 20 years at a cost of R218 billion, is yet to get environmental authorisation for its plans. It also needs to conclude agreements with Eskom and the state ports company.<\/p>\n
While Karpowership would burn gas to supply power, some of the other bids included solar power projects in addition to using diesel and gas.<\/p>\n
Karpowership has been “convincingly vindicated by the ruling,” the company said in a response to a query. “Today, we are one very significant step closer to commercial closing and the implementation of the company\u2019s three projects.”<\/p>\n