Government wants to cut Karpowership deal to 5 years

The government has given approval for Karpowership to dock in Richards Bay, Ngqura and Saldanha Bay. Picture: Supplied

The government has given approval for Karpowership to dock in Richards Bay, Ngqura and Saldanha Bay. Picture: Supplied

Published Jun 1, 2023


The government is considering reducing the deal for Karpowership from 20 years to between five and 10 years.

This was based on the fact that this was an emergency project and it would intervene while the country tries to resolve the energy crisis.

The head of project management in the Presidency, Rudi Dicks, said there has been a delay in the roll-out for Karpowership.

Dicks said this week, during a media briefing, that there were already discussions at the National Energy Crisis Committee about having shorter contracts for Karpowership instead of the 20-year term.

He said the possibility was whether the contracts would be for five years or 10 years.

But there were other delays caused by an environmental impact assessment that had not been received yet.

In February, the minister of transport gave approval for the Karpowership to dock in Richards Bay in KwaZulu-Natal, Ngqura in the Eastern Cape and Saldanha Bay in the Western Cape.

President Cyril Ramaphosa said recently that power ships were needed because of the energy crisis.

It would be an important intervention while the government tries to fix Eskom’s power stations and get more megawatts on the grid.

Dicks said the power ships projects had not yet been finalised.

“On the power ships project, that of course is still not finalised, largely because there are significant delays in not receiving the environmental impact assessment. That is quite critical because there is an important part of any of those investments because of the impact they may have on the environment. These projects are intended to be allocated at Saldanha, Ngqura and Richards Bay. The condition of proceeding with that is that it receives all permitting and authorisation.

“There is another dynamic that we have also introduced ... that there is a conversation to be heard around the term of these projects. The initial term was 20 years.

“We have taken a view at Necom (the National Energy Crisis Committee) that a shorter term period would have to be looked at, particularly between five and 10 years. It’s really because this is an emergency intervention of ending load shedding and ensuring that we reform and restructure the electricity sector and meet demand and stable electricity supply.

“This goes to the heart of whether one has to sign for 20 years. This is the conversation that we are having. Minister (Kgosientsho) Ramokgopa is already having engagements with regard to these sorts of interventions going forward,” said Dicks.

[email protected]

Current Affairs