R218bn power-award feud ‘self serving’, could delay emergency energy supply to SA

02 June 2021 - 12:20 By Antony Sguazzin
The procurement of emergency power was instigated to ease a crisis caused by the inability of Eskom to meet the country’s needs.
The procurement of emergency power was instigated to ease a crisis caused by the inability of Eskom to meet the country’s needs.
Image: Alon Skuy

SA said a legal challenge by a rejected bidder for power-supply contracts, including one worth an estimated R218bn, was “without merit” and “self serving”.

In his answering affidavit to DNG Energy’s demand to be named as a preferred bidder in an emergency power round, the head of the country’s Independent Power Producer Procurement Programme Office (IPP) said DNG’s bids were disqualified because they were inadequate.

DNG had demanded that it be appointed to provide about 1,220 megawatts of electricity by August 2022 in place of Turkey’s Karpowership, alleging that the process had been tainted by corruption. The IPP office refuted this. The case will be heard on July 14-16 in the high court.

“The applicant has failed to show any illegality in the tender process,” said Tshifhiwa Bernard Magoro, the head of the IPP Office in the affidavit. “The applicant’s bid did not meet the qualifying criteria.”

The case could derail the government’s attempts to ease electricity shortages that have hobbled the economy for more than a decade as most winning bids need to meet financial close by the end of July. The procurement of emergency power was instigated to partially ease a crisis caused by the inability of Eskom to meet the country’s needs.

The struggling electricity provider said this week it would continue to cut power supply nationwide until Friday, citing breakdowns at its plants. It initially resumed rolling blackouts on May 31. The power cuts have stifled economic growth.

Karpowership

Karpowership’s bid has attracted criticism because it won an exemption from a local-content requirement and because it locks the country into using natural gas, a fossil fuel, for two decades. DNG’s bids were also based on gas-fired plants.

Magoro’s affidavit also responded on behalf of the department of mineral resources & energy and energy minister Gwede Mantashe.

“The applicant's bids were disqualified because they did not comply with a plethora of qualification criteria,” he said.

Magoro listed DNG’s alleged inability to prove it owned land where it planned to build plants, secure financial backing, comply with environmental requirements and prove that it could supply interrupted power.

“DNG issued its application without us having sight of the record and to this date we haven’t had sight of the full record,” the company said in a response to queries. “It is therefore irresponsible for any party to comment or make sweeping statements on whether we qualified or not when we haven’t been given the record and time to scrutinise the full record.”

Magoro also said DNG failed to provide evidence of corruption.

“The inescapable inference is that the applicant’s allegations are self-serving and its claim to be acting in the public interest is baseless,” he said.

 

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