A legal wrangle over a power supply contract worth an estimated 218 billion rand ($16 billion) could derail the South African government’s attempts to ease electricity shortages that have hobbled the economy for more than a decade.

The case filed by DNG Energy last month to be named as a preferred bidder to provide about 1,220 megawatts of electricity by August 2022 in place of Turkey’s Karpowership won’t be heard in the Pretoria High Court until mid-July at the earliest. Karpowership and other bidders who won smaller deals have until the end of that month to conclude the necessary regulatory and funding requirements for their contracts to take force.

DNG’s court case “recklessly seeks to impede an infrastructure program much needed in South Africa: that is, ensuring a continuous supply of electricity,” Karpowership said in an answering affidavit seen by Bloomberg.

The procurement of emergency power was instigated to partially ease a crisis caused by the inability of state power utility, Eskom Holdings SOC Ltd., to meet the country’s needs. 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 court case
A court requirement schedule shows Johannesburg-based DNG and the nine respondents in the case, including the government and Karpowership, need to file their arguments on July 9. A court date has yet to be set, DNG said in a response to queries from Bloomberg.

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Source: SweetCrudeReports