Powership deal gets lifeline

Turkish company Karpowership has been handed another lifeline in its bid to secure a R225-billion deal to supply emergency power to South Africa.

The Daily Maverick reports that energy minister Gwede Mantashe has inexplicably given the company a 2-month extension on a deadline for financial close, which the minister himself described as non-negotiable.

In March 2021, the department announced that Karpowership was one of the preferred bidders in the Risk Mitigation IPP Procurement Programme (RMIPPPP), which aims to alleviate strain on the country’s grid and fight load-shedding as Eskom works to maintain ageing infrastructure and brings new power generation online.

Karpowership would moor three of its liquified natural gas ships — one each at the Coega, Richards Bay, and Saldanha harbours — to supply around 1,220MW of electricity.

To ensure they can connect to the grid by August 2022, Mantashe stated that all the preferred bidders were required to reach financial closure by no later than the end of July 2021.

“Due to the urgency to bring power online, this date is not negotiable. It is for the preferred bidders to manage all the risks to reach financial close,” the minister stated.

However, in a recent response to questions from The Daily Maverick, the department confirmed that Karpowership had been given until 30 September to reach financial close.

It did not respond to questions over the reasons for the extension, so it is unclear why the company appeared to be getting special treatment.

The extension comes despite a report that the Green Scorpions has recommended criminal charges be laid against the company for intentionally misleading the Department of Forestry, Fisheries, and the Environment (DFFE) in its bid to secure the deal.

The environmental protection unit referred a docket to the NPA’s Director of Public Prosecutions to prosecute the company for its attempt to circumvent environmental regulations.

This comes after Karpowership secured permits that exempted it from performing environmental impact assessments (EIAs) under the pretence that its powerships would help provide emergency power that could save lives and prevent further environmental damage.

DFFE withdrew the permits two months after being issued when it found there was no emergency situation that justified them.

Environmental protection groups have warned the powerships will generate underwater noise that could disrupt sea life and fishing in the areas where they were planned to be anchored.

Karpowership, Triplo4 Sustainable Solutions, and Nselenduna Consulting are being accused of providing incorrect or misleading information to the department to bypass the EIAs.

If found guilty, parties could face a fine of up to R10 million and/or 10 years’ imprisonment.

Karpowership has denied the allegations, labelling them as a “vicious adversarial and aggressive campaign”.

It has lodged an appeal with the DFFE over its refusal to grant the necessary environmental clearance for the powerships.

The company’s lawyer, Tim van der Merwe of Gunn Attorneys, has claimed that it was impossible to assess their environmental impact until they were in the harbours.

Environmental minister Barbara Creecy is expected to rule on the appeal in September.

The company must also secure final approvals from Eskom, Nersa, and Transnet.

Nersa will hold a virtual public hearing on 19 August to discuss the powership plan. Members of the public have until 13 August to register to attend the hearing.

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