DNG granted postponement in Karpowership case - judge 'between rock and hard place'

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SA energy company DNG is challenging the selection of Turkish company Karpowership as main preferred bidder in government's Risk Mitigation IPP Procurement Programme.
SA energy company DNG is challenging the selection of Turkish company Karpowership as main preferred bidder in government's Risk Mitigation IPP Procurement Programme.
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  • SA energy company DNG is challenging the selection of Turkish company Karpowership as main preferred bidder in government's Risk Mitigation IPP Procurement Programme.
  • The hearing of the main case has been postponed until 30 November at the request of DNG, which anticipates that more evidence of its claims of corruption in the tender process might come to light by then.
  • Government and Karpowership deny any wrongdoing and claim the delay puts the attempt to fast-track energy supply at risk.

The North Gauteng High Court in Pretoria on Thursday allowed the postponement of an appeal against the emergency power tender involving controversial bidder Karpowership SA.

DNG Energy, which brought the appeal, lost out in government's Risk Mitigation IPP Procurement Programme (RMI4P), an attempt to fast-track new power production of around 2 000 MW and reduce the risk of load shedding. After DNG's tender was unsuccessful, it alleged that there was corruption involved in the tender process.

That allegation has been rejected by the government and Karpowership SA.

But Parliament and the Hawks have been investigating allegations of wrongdoing, and DNG brought the urgent application to postpone the court hearing in the hope that, by 30 November, the probe might have been completed.

It is hoping to include the official findings in its case.

DNG alleges that the tender had been manipulated to favour Karpowership, and that it (DNG) had been the victim of a shakedown by senior government officials and a businessman associated with Minister of Mineral Resources and Energy Gwede Mantashe, Fin24 previously reported.

The original RMI4P tender was issued and adjudicated by Mantashe's department, which selected Karpowership SA as preferred bidder for the lion's share of 2 000 MW to be supplied to Eskom, worth a potential R225 billion over at least 20 years.

If Karpowership SA concludes a contract with government, it will start supplying 1 220 MW of power from five powerships moored in Richards Bay, Saldanha and Coega.

'Between a rock and a hard place'

In granting DNG's urgent application for a postponement, Judge Joseph Raulinga said he was "between a rock and a hard place".

"What if the 'ifs' raised by the applicants become a reality?" said Raulinga. He took into account factors including the circumstances and case law, he said.

Lawyers for government, Karpowership SA and the other respondents in the case had emphasised the need for SA to close its energy gap and avoid rolling power cuts, adding that the probe might not be finalised by 30 November.

DNG attorney Advocate Louis Hollander had argued that while the company understood SA's urgent energy needs, relevant evidence could come to light in the probe regarding the corruption allegations. If there were corruption, it would "override all other issues", said Hollander.

In addition to DNG's court case, the tender has faced other obstacles.

A South African business organisation commissioned a legal opinion that argues South Africa’s transport minister can’t compel the national port authority to allow Karpowership's floating power plants to moor in the country’s ports. Karpowership has now commissioned a rival report from its own lawyers, Pinsent Masons, arguing that it can.

The award to Karpowership has also been challenged by environmentalists.


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