DNG welcomes postponement of hearing into Karpowership's RMIPPPP award

9th September 2021 By: Chanel de Bruyn - Creamer Media Senior Deputy Editor Online

Gas-to-power solutions provider DNG Energy has welcomed the decision of the Hight Court in Pretoria to grant its request for the postponement of an application to have the selection of Karpowership South Africa as a preferred bidder in the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) set aside.

DNG embarked on legal action in April, alleging corruption in the bidding process. Karpowership, whose three projects account for about 1 220 MW of capacity, and the Department of Mineral Resources and Energy have denied the allegations.

In June, DNG applied to the court, seeking to replace Karpowership as a preferred bidder under the RMIPPPP and, more recently, requested that its application be postponed.

“We, as DNG, advanced an application for a postponement out of a belief that the case is not ripe for hearing in that vital and pertinent information is yet to come to light as a result of various processes in relation to the RMIPPPP not having been concluded as of yet, which processes we only became aware of as recently as mid-August,” DNG CEO Aldworth Mbalati said in a September 9 statement.

He had told Business Day earlier this month that the company believed important evidence would come to light during an investigation by the Hawks that was under way.

The corruption allegations are also expected to be investigated by the Parliamentary Portfolio Committee on Energy.

"Our belief, which the court echoes, is that the hearing of the main matter should be and now is postponed to late November, in order to allow for the outcomes of these processes to be finalised and/or to allow the processes to progress to a more advanced stage, thereby allowing the court to be provided with a full and accurate record of evidence," Mbalati added.

The matter will now be heard on November 30, December 1 and December 2.

Meanwhile, the Department of Forestry, Fisheries and the Environment has rejected the environmental authorisations for Karpowership's proposed RMIPPPP projects.

These actions threaten to delay the financial close of projects under the RMIPPPP, which was meant to serve as the emergency procurement of 2 000 MW of electricity generation capacity to help reduce South Africa's electricity supply gap.

Preferred bidders under the RMIPPPP have until September 30 to reach financial close. Those projects that are unable to meet the deadline will not proceed.