South African emergency power tender challenged in court

JOHANNESBURG, April 30 (Reuters) - A South African government tender for 2,000 megawatts of emergency power has been challenged in court by one of the companies that lost out, potentially delaying capacity being added to the grid and prolonging an electricity crisis.

South Africa's DNG Power wants the High Court to review its disqualification from the tender and prevent the government from signing and implementing agreements with the preferred bidders, court papers seen by Reuters show.

The government named the eight preferred bidders last month. Turkey's Karpowership was a major winner, with three of its floating gas power stations among the eight projects chosen to help to end recurring power outages that have cost the economy billions of dollars in lost output.

In an affidavit, DNG Power's Aldworth Mbalati alleged the tender's outcome was influenced by corruption and that some of the preferred bidders had been unlawfully granted exemptions.

The Department of Mineral Resources and Energy, the ministry responsible for the tender, said in a statement that it intended to oppose the matter in court. "The department will not at this stage comment on the merits of the case," it added.

A Karpowership spokesman told Reuters: "The false allegations levied by a failed bidder are alarming. ... All bidders followed the same transparent process."

South Africa's biggest opposition party the Democratic Alliance has alleged the emergency power tender was geared towards selecting Karpowership from the start.

Backed by environmental activists opposed to Karpowership's projects for reasons that include possible marine pollution, the Democratic Alliance has demanded a parliamentary investigation, but so far without success.

The government said in March the eight projects selected as preferred bidders would inject 45 billion rand ($3.1 billion) of investment into the economy and that the first power would flow from August 2022. The projects are due to supply power over 20 years.

($1 = 14.4139 rand)

Reporting by Alexander Winning and Wendell Roelf; editing by Barbara Lewis

Our Standards: The Thomson Reuters Trust Principles.