South Africa Says DNG’s Challenge to Power Award “Without Merit”

South Africa said a legal challenge against the award of an electricity supply contract valued at an estimated 218 billion rand ($ 16 billion) by DNG Energy was “unfounded” and “selfish”.

In his affidavit in response to DNG’s request to be named as the preferred bidder in an emergency power round, the head of the country’s Independent Power Producer Procurement Program Office said that DNG’s bids had been disqualified due to inadequacy.

DNG had called for around 1,220 megawatts of electricity to be provided by August 2022 instead of the Turkish Karpovership, as the process was fraught with corruption. The IPP bureau refuted this. The case will be heard in the South African High Court from July 14-16.

“The applicant has not shown any illegality of the tendering process,” said Tshifhiwa Bernard Magoro, the head of the IPP office, in the affidavit. “The applicant’s offer did not meet the admission criteria.”

The fall could undo government attempts to alleviate the power shortage that has been holding back the economy for more than a decade, as most successful deals have to meet the financial close by the end of July. The procurement of emergency power was initiated to deal with a crisis caused by the inability of the state-owned utility Eskom Holdings SOC Ltd. was caused to meet the needs of the country, partially to alleviate.

Karpov ship

Karpowership’s offer has drawn criticism for receiving an exemption from a local content requirement and binding the country to the use of natural gas, a fossil fuel, for two decades. DNG’s offers were also based on gas-fired power plants.

Magoro’s affidavit also responded on behalf of the Ministry of Natural Resources and Energy and Energy Minister Gwede Mantashe.

“Applicants’ offers were disqualified because they failed to meet a number of qualification criteria,” he said. Magoro cited DNG’s alleged inability to demonstrate that it owned land intended to build facilities, secure financial support, comply with environmental regulations and prove that it could provide power interruptions.

“DNG submitted its application without us having viewed the file and we have not yet viewed the complete file,” the company replied to inquiries. “It is therefore irresponsible for either party to comment or make general statements about whether we have qualified or not if we have not been given the records and the time to review the complete records.”

Magoro also said DNG did not provide evidence of corruption.

“The inevitable conclusion is that the complainant’s allegations are selfish and that his allegation of acting in the public interest is unfounded,” he said.

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