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Round 2 of Eskom legal battle: UDM, others now want answers about corruption, $8.5bn from rich nations

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The UDM and others seek records that explain the rationality of government's decision to decommission coal-fired power stations.
The UDM and others seek records that explain the rationality of government's decision to decommission coal-fired power stations.
Richard Du Toit/Gallo Images
  • The UDM and others are seeking documentation that explains government and Eskom's decisions regarding the country's just energy transition.
  • The information will support the case to have decisions to decommission coal-fired power stations and the acceptance of the $8.5 billion just transition deal set aside.
  • The application was heard on Friday, and judgment has been reserved.
  • For climate change news and analysis, go to News24 Climate Future.

Fresh from winning the first part of their legal battle, the United Democratic Movement (UDM) and others are now awaiting the second part of their case, to hold government accountable for the costs of load shedding.

They are seeking documents from government and Eskom to explain the conditions of the president's acceptance of a $8.5 billion offer from rich nations to support South Africa's just energy transition as well as to decommission several coal-fired power stations.

The application for the documents was heard at the North Gauteng High Court in Pretoria on Friday.

The court on Friday made a ruling on Part A of the matter, which forces the government to exempt schools, police stations, hospitals and clinics from load shedding – within 60 days. Public Enterprises Minister Pravin Gordhan will appeal this ruling, which would place "undue risk" on the country's grid, News24 reported.

Part B of the matter is to be heard in September, but the applicants require information from government and Eskom which may be useful to strengthen their case. They seek a legal review and setting aside of the decision to accept the $8.5 billion offer and the decommissioning of coal power stations Komati, Camden, Hendrina and Grootvlei.

They applied to the court to compel Eskom and government to hand over the relevant documents or information. For now, judgment has been reserved.

Apart from the UDM, the other applicants include the Inkatha Freedom Party, Action SA, the South African Federation of Trade Unions, the National Union of Metalworkers of South Africa and 12 others. Eskom, Public Enterprises Minister Pravin Gordhan, President Cyril Ramaphosa and Minister of Mineral Resources and Energy Gwede Mantashe are among the eight government respondents.

READ | Debt Relief Bill frees up billions to fix 'short-circuited' Eskom plants

The court application refers to allegations of corruption at Kusile power station, which have compromised the plant's performance and contributed to load shedding. The papers make specific reference to former CEO André de Ruyter's interview with eNCA's Annika Larsen, where allegations of corruption were made.

De Ruyter had told Larsen that the ANC's investment arm, Chancellor House, had been involved in the "the manipulation of design criteria" for Medupi and Kusile to ensure contractor Hitachi got the tender, News24 previously reported.

The applicants also note in the papers that the decommissioning of old coal power stations is dependent on optimal performance by both Kusile and Medupi.

"It was always envisaged that once functional the new builds, Kusile and Medupi would achieve two goals. First, they would add capacity to the grid. Second, that capacity would be added in a manner that gave effect to the government respondents' long-term emission reduction goals, an integral part of the JET programme … These two goals necessarily formed part of the broader decision when and how older stations would be decommissioned …" the papers read.

Therefore, records explaining why Medupi and Kusile are "beset with problems" and why they have done "little or nothing" to alleviate load shedding is material to the decisions made regarding the decommissioning of old coal power stations, the applicants said.

They put forward that alleged corruption at Kusile is material to their case that it is "unlawful" to decommission power stations, and this decision must be reviewed and set aside. According to the court application:

The rationality and lawfulness of Eskom's decision to close power stations cannot be properly interrogated without a full understanding of the reasons why Kusile failed to function optimally as a power station. No doubt the impact of this failure in generation capacity and sufficient supply are integral to and impacted the operation and maintenance of other stations, including decisions such as which stations were to be decommissioned and when […]

The applicants, therefore, seek that Eskom files a complete record of all corruption at Kusile. They also seek documents related to the procurement process for the design and commissioning of Kusile and documents relevant to the station's construction that explain why it is delayed and the financial implications of that.

"These records are necessary because allegations of corruption at Kusile impact the lawfulness of decisions made to close stations across the generation fleet," the court application reads.

Komati decommissioning

The applicants also want more information regarding the decisions to decommission power stations.

They seek records on the decommissioning of Komati, which was completed last year with the help of an R8 billion loan from the World Bank.

The applicants want full details of the loan and information on what the loan be used for, according to the application. They also want minutes of meetings and material documents that were part of the application process for the loan and the "undertakings" Eskom made regarding Komati and other power stations. The applicants also seek details on the total amount required to decommission Komati and any power station in the country – and the implications it would have on meeting electricity needs.

As for the $8.5 billion offer made by the UK, US, Germany, France and EU on the sidelines of COP26 to aid South Africa's transition to a low-carbon economy, the applicants require any receipts on portions of the pledge that have been paid.

They also want minutes of meetings, programmes and documentation on how the funds will be used to implement the just energy transition. They want to know what the implications are of the deal on the management of coal-fired power stations.

Applicants also seek further details on Eskom's plans and the cost of decommissioning Camden, Hendrina and Grootvlei.

The applicants put forward that with the relevant records, they can better interrogate decisions made to decommission the coal plants, and if necessary, they would amend or supplement their case.


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