S. Africa Power Program Faces Delay as Appeal Right Granted

(Bloomberg) -- South Africa's bid to secure power to ease crippling electricity outages faces a further delay after a losing bidder was allowed to partially appeal a ruling that removed an obstacle to the projects going ahead.

DNG Power Holdings Ltd., which in January lost a court case seeking to overturn the award of 2,000 megawatts of so-called emergency power contracts, can appeal against the government and Karpowership, which won the right to supply about 60% of the allotted generation capacity. 

Other winning bidders including groups involving TotalEnergies SE, Electricite de France SA, Scatec ASA and Acwa Power Co. can proceed with their projects, the High Court said.

The country's efforts to add power capacity through the emergency program ground to a halt when DNG filed its court case last year, alleging corruption in the award of the contracts to Karpowership. It also sought to halt the other winning bids.

In earlier court documents, the government had said DNG's bid was deficient, a view supported by Judge Joseph Raulinga, who wrote in his January ruling that “the demonstrable reason for DNG's unsuccessful bids was because it failed to meet a myriad” of qualification criteria.

Still, in Friday's decision he said there was “reasonable prospects of appeal” for DNG regarding evidence that had earlier been disqualified.

DNG was ordered to pay the costs of all other respondents other than the government and Karpowership. 

The company has said it wants its bids, which involve the supply of electricity from gas-fired power plants, to replace those of Karpowership that sought to bring power plants mounted on ships to South Africa.

“While we respect the judgment, as well as the independence of the legal process, the current appeal is another irresponsible attempt at delaying the implementation” of the power program, Karpowership said. “Karpowership's commitment to reaching financial close and moving towards concluding” its projects is unwavering,” the company said.

The lawsuit and the uncertainty it created had prevented the bidders from completing financial arrangements with lenders, a milestone known as financial close.

South Africa has suffered intermittent power outages for over a decade.

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