A court hearing that started 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 ruling will also be critical for the businessman who blocked the plan with his lawsuit.
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. DNG’s bids for the biggest piece of the 2,000 megawatt power deal had been an attempt at bolstering its fortunes after some failed projects. In court documents, the government said DNG’s bid was deficient, a view supported by Judge 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.
At least five senior executives and officials have quit since July, they said, declining to be identified because the information isn’t public. The lawyers said DNG’s cash-flow constraints are due to the “the depressed world market in the last two years and as a result of which Helios did not historically meet its obligations towards DNG in full.”
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