Outa files application to review, set aside Karpowership licences

THE Organisation Undoing Tax Abuse (Outa) has filed an application to review and set aside the National Energy Regulator of South Africa's (Nersa) decision to grant three Karpowership independent power producer (IPP) generation licences.

Outa executive director, advocate Stefanie Fick said: “It is submitted that Nersa has displayed a cavalier attitude towards statutory compliance and public concerns throughout its decision-making process to award generation licences to Karpowership.

“The decisions to award the licences to Karpowership for generation at Coega, Saldanha Bay and Richard's Bay respectively were irrational, unreasonable, and taken without regard to relevant considerations …”

Other arguments included concerns around the Karpowership IPPs compliance with environmental legislation.

The Green Connection has also launched an application in the Gauteng High Court in Pretoria seeking to review and set aside the Nersa's decision.

Their community outreach coordinator Neville van Rooy said: “Since it was first announced, the whole Karpowership debacle has gone against the spirit of fairness, and we believe that the granting of the licences is not in the interest of the people, electricity users or small-scale fishing communities whose livelihoods could be adversely affected by the negative environmental impacts.”

In February 2020, Mineral Resources and Energy Minister Gwede Mantashe determined that 2 000 MW of emergency generation capacity should be procured through the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP).

A year later in March the Department of Mineral Resources and Energy (DMRE) announced seven preferred bidders, including the three Karpowership SA companies.

The Karpowership projects would together provide 1 220 MW of gas-fired generation capacity.

The ships housing the gas-fired power generation capacity (powerships) are supplied with gas from floating storage and regasification units (FSRUs), which are in turn supplied with liquified natural gas (LNG) on purpose-built LNG carrier ships.

The powerships and FSRUs would anchor permanently in the three harbours for the planned 20-year contract.

Karpowership SA accused Outa's application of having singled them out to derail the delivery of three "much needed projects”.

“As always Karpowership SA has faith in South Africa's robust legal system and is confident that this latest court case – brought as an attempt to overturn the granting of Nersa licences to Karpowership SA – will be unsuccessful,” a spokesperson said.

Nersa said it had not yet received the court application.

“However, once Nersa receives the application, Nersa will study it and advise whether Nersa will be opposing the application for judicial review … ”