Fikile Mbalula flipped a Sunday ‘ace’ card in the Karpowership poker saga, but does he have a winning hand?
Unperturbed by the concerns of the national harbour authority planners, former Transport Minister Fikile Mbalula signed a special directive ordering Transnet chief executive Pepi Silinga to make way for the Turks and their 49% local power partners for the next two decades.
In his last noteworthy act as the Minister of Transport, Fikile Mbalula interrupted his weekend to sign a crucial document to ensure that the Turkish-owned Karpowership group gets unfettered rights to park gas ships in three major harbours for 20 years.
Mbalula (now the ANC Secretary-General) signed the document on Sunday, 26 February 2023 – barely a week before he left his ministerial position following Cyril Ramaphosa’s Cabinet reshuffle and just nine days before the national department of Environmental Affairs issued a series of decisions which placed the multibillion-rand Karpowership environmental approval process in jeopardy.
Perhaps more significantly, Mbalula signed the special directive just days after the Transnet National Ports Authority (TNPA) reiterated strong concerns that the Turkish powership project was in “direct conflict” with its own development plans for the Coega harbour.
This is because Karpowership wants to anchor three large power generation and gas supply ships in the same limited harbour space that Transnet has earmarked for a new general cargo berth and liquid bulk berths (A100) in the Coega industrial development zone.
However – Karpowership directives can only be issued by the Transport Minister to “safeguard national security” or to “promote the national, strategic or economic interests” of the country.
Though Mbalula signed the document more than three months ago, a copy of the directive only came to light last week (31 May 2023) during a legal appeal process by Karpowership.
Karpowership legal representative Adam Gunn says in his appeal papers that in addition to Mbalula’s special directive, the powership project has also been classified as a Strategic Integrated Project (SIP).
So, while there might have been “potential discrepancies” between the Karpowership and Transnet plans, Gunn argues that the Turkish plan should take precedence because “SIP projects are of national importance”.
He states that: “The Karpowership SA project team has been in active engagement with TNPA since being awarded Preferred Bidder status on 18 March 2021 … Various streams, dealing with technical, commercial, legal and environmental matters, have been put in place between TNPA and Karpowership.
“Such engagements have been at a port level with TNPA representatives as well as on National level to ensure overall alignment with TNPA’s requirements.”
During these engagements it was agreed that Karpowership could park its ships in Coega for between five to seven years – but then relocate its vessels to a new (unspecified location) “when and if the Port initiates a process to start developing the A100 berth”.
But statements by Transnet and the Department of Forestry, Fisheries and Environmental Affairs (DFFE) appear to contradict Gunn’s version.
For example, Transnet indicated on 13 December 2022 that it already had environmental approval to build new berths at Coega and “it must be registered that the Port development will take precedence over the (Karpowership) proposed operation”.
Powership plan was in ‘direct conflict’ with Transnet development plans
Transnet reiterated its concerns in a letter to the DFFE on 6 February 2023 that the powership plan was in “direct conflict” with Transnet development plans.
But just two weeks after Transnet’s letter was sent, Mbalula appears to have intervened and played his “ace card” – a special directive that effectively quashes any further dissent from the state-owned harbour entity.
According to Gunn, this directive is “binding and indissoluble”, and will permit the “unencumbered development of the Karpowership projects”. And, he said, it provides “a clear indication of the South African Government’s commitment to resolving the current energy crisis and support for the Karpowership projects that they are indeed to take place in the Ports and specifically in the Port of Ngqura”.
Gunn further suggests that “amicable discussions” are still under way between Transnet and Karpowership and he hints that a letter from TNPA chief Silinga could emerge shortly “confirming the amicable agreement for the citing [sic] of the Powerships”.
But questions are emerging now on whether Mbalula’s exercise of his extraordinary powers can be considered rational or reasonable in the context of “safeguarding national security” or promoting “the national, strategic or economic interests” of the country.
Dr Gary Koekemoer, a resident of Gqeberha and chairperson of the Algoa Bay branch of the Wildlife and Environment Society of South Africa (Wessa) said:
“It seems very obvious that as he was walking out the door, he [Mbalula] signs this directive and leaves it to his successor [new Transport Minister Sindisiwe Chikunga] to resolve the consequences.”
Koekemoer suggests that there are significant ramifications for Transnet related to the planning and relocation of other commercial operations around Gqeberha.
“We find it irregular that the Minister has simply issued the directive, seemingly without considering other developments taking place in the port. How can you develop the port when there are now three large ships in the way?”
Wessa had also submitted formal applications in terms of the Promotion of Administrative Justice Act and the Promotion of Access to Information Act to access the full range of correspondence exchanged between Transnet, Karpowership, its environmental consultants (Triplo4) and other branches of government before critical decisions were taken to issue the Section 79 directive.
Wessa was also concerned that Karpowership and its consultants used the extended environmental impact assessment process to progressively finesse its applications.
“How many bites at the cherry will Karpowership be allowed?” he asked.
Several civil society groups raised similar concerns in a statement last week.
The South Durban Community Environmental Alliance, groundWork, The Green Connection, Natural Justice, and the Centre for Environmental Rights suggested the South African public should be wary of a deal that was punted as a silver bullet to ease rolling blackouts.
“[We] question government’s ongoing and unwavering support of Karpowership, because even though the company failed to meet so many crucial deadlines, government is still willing to bend over backwards to accommodate this Turkish-based company.
‘Having a R200-billion investment sail away in 20 years is not a legacy for the youth of South Africa’
“South Africans need to stand up and question why these powerships are being touted above all other options when it will not even address our energy crisis? The who, why and how needs to be publicly aired. Having a R200-billion investment sail away in 20 years is not a legacy for the youth of South Africa,” suggested groundWork spokesperson Yegeshni Moodley.
Responding to queries from Daily Maverick on 16 May, Transnet said it would be “premature” to express its views on Mbalula’s directive at this point.
“The port development plan aimed at accommodating additional and much-needed liquid bulk handling facilities at the Port of Ngqura’s A100 location will continue as planned, in support of the regional industrial sector. TNPA will continue to work with port stakeholders to ensure fairness and transparency in finding workable solutions.”
The national Transport department did not respond directly to our queries about the documented conflicts, but issued a media statement on 18 May declaring that the Minister of Transport was empowered to “approve applications of this nature”.
“The Transnet National Ports Authority (TNPA) was consulted and supported the approval of the application. It is for this reason that the Minister gave the TNPA latitude to make necessary decisions in implementing this Directive, such as considering the safety measures and operationability of this Directive.” DM