Business urges speedy ‘Plan B’ for SA electricity crisis as Mbalula drawn into Turkish power ship controversy

Transport Minister Fikile Mbalula was on Wednesday drawn into the multibillion-rand powerships controversy when it emerged that the Department of Mineral Resources and Energy (DMRE), Transnet and the Istanbul-controlled Karpowership SA group are apparently attempting to dodge yet another regulatory requirement by getting Mbalula’s office to approve a shortcut to the normal application procedures.

Mbalula’s office confirmed that his department had been asked to approve a special “Ministerial Declaration” for Karpowership that could effectively speed up or circumvent the normal approval process from Transnet on the grounds that the project is needed to “promote the national, strategic or economic interests of the Republic”.

The Fatmagul Sultan floating power plant moored offshore at the Lebanese town of Zouk Mosbeh. (Photo: EPA-EFE / Nabil Mounzer)[/caption]

Mbalula’s office insisted that he would consult with the Cabinet and other relevant stakeholders before deciding whether to issue a special directive.

However, Business Unity South Africa (Busa) has voiced serious concerns and asked the government to clarify whether it is now taking “mitigation actions” to procure alternative power supplies in case the Turkish plan collapses or is not finalised timeously.

This came to light on Wednesday after a legal opinion prepared for Busa was leaked to Daily Maverick by independent sources, cautioning that approval by Mbalula would most almost certainly be illegal and therefore be vulnerable to a strong legal attack by several parties — including rival power companies who were not granted preferred bidder status by Minister Gwede Mantashe’s DMRE this year.

One of the losing bidders, Aldworth Mbalati, has already lodged a Pretoria High Court appeal in which he alleged major irregularities in the Karpowership contract award.

Karpowership has previously tried to dodge a mandatory Environmental Impact Assessment process, by persuading the national environment department that its project should be exempted because of the Covid-19 crisis. This exemption was quashed by Environment Minister Barbara Creecy after it was exposed by Daily Maverick. The Turkish company was also granted an exemption from local content requirements that may have prejudiced certain bidders.

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