A court hearing on Tuesday will determine whether South Africa can move forward with a project to top up its energy capacity after a year of record power blackouts.
The country’s efforts to add power capacity with an emergency program ground to a halt when 39-year-old Aldworth Mbalati’s DNG group of companies sued the government alleging corruption in the award of a contract.
For Mbalati’s DNG, the court ruling would come as it finds itself bogged down by mounting financial woes, according to executives who’ve quit his company. In court documents, the government said DNG’s bid was deficient, a view supported by High Court Judge Joseph Raulinga, who said in his ruling that “the demonstrable reason for DNG’s unsuccessful bids was because it failed to meet a myriad” of qualification criteria.
“Banks remain risk averse about the DNG appeal,” said Peter Attard Montalto, head of capital markets research at Intellidex. “If the case is admitted to the roll it will delay financial close of the emergency power program considerably further and push back the arrival of energy onto the grid maybe into 2024.”Failure of the appeal would raise questions about what’s next for DNG — and Mbalati.
“With regard to senior management, our client has entered into arrangements with same on taking salary reductions until Helios completes their contributions at which stage that reduction will be reversed.” Helios didn’t respond to queries from Bloomberg about the claim by Mbalati’s lawyers that it hasn’t met its obligations to DNG.
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