Rival lays out its Karpowership case

DNG Energy, one of the losing bidders in the government’s procurement of emergency power, says Turkish company Karpowership SA was the sole beneficiary of changes made to the tender bid shortly before the deadline. DNG claims the bid was rigged to favour Karpowership.

DNG Energy, one of the losing bidders in the government’s procurement of emergency power, says Turkish company Karpowership SA was the sole beneficiary of changes made to the tender bid shortly before the deadline.

DNG claims the bid was rigged and the deadline for interested parties to submit their bids was extended twice to favour Karpowership, resulting in the company winning the lion’s share of the energy contracts.

In March, Karpowership was named as one of the preferred bidders to supply the bulk of the 2,000MW in capacity the government is procuring to reduce load-shedding.

Through the use of floating power plants, it proposes to use liquefied natural gas to produce 1,220MW of power for Eskom under SA’s risk mitigation independent power producer procurement programme.

DNG has approached the high court in Pretoria to overturn the contract awarded to Karpowership and to order the minerals & energy department to award the contract to it instead.

On the first day of the threeday hearing on Tuesday, DNG’s legal representative, advocate Mark Nowitz, argued that interested parties were informed that the initial October 2020 deadline for bid submissions would be extended to November of the same year.

Nowitz said the briefing note for the tender was modified and the initial requirement for bidders to include local content was excluded. He said Karpowership benefited from the modifications to the tenders.

“They could bring their 1980s ships that had been manufactured abroad and they could simply park their ships in our ports and didn’t have to worry about local content. And they didn’t have to worry that their ships were 30 to 40 years old.”

There was no evidence, Nowitz said, that anyone else benefited from the exemptions except for Karpowership. He contends that DNG’s bid to supply 1,300MW of power to Eskom was rejected because his client did not want to engage in corrupt activities.

Both the department of mineral resources & energy and Karpowership have denied claims of irregularities in the process as alleged by DNG.

DNG and other bidders were informed of the changes to the bid and complied with the requirements in their submissions, counsel for the department of mineral resources & energy, Ngwako Maenetje said.

DNG launched its court bid to overturn the contract awarded to Karpowership after its submission was unsuccessful. DNG’s bid was rejected because it did not meet the legal and financial requirements, among others, Maenetje said.

“You want these requirements met because the project you select must be readily dispatchable. So you don’t want to select a project, then you must wait a couple of years before certain rights are sorted … You must meet all of them and even then you are not guaranteed to get the [tender] because there is still a discretion by the court,” he said.

Initially scheduled to connect to the grid by mid-2022, the programme has been hit by delays, with environmental risks posed by Karpowerships’ ships that will be docked at three of the country’s ports a concern.

The case continues on Wednesday.