The Gauteng division of the High Court has dismissed an application brought by the Coal Transporters Forum (CTF) to set aside certain agreements between Eskom and privately-owned and independent electricity producers.
The underlying motivation for the application to cancel agreements Eskom signed in April last year is to prevent new agreements between Eskom and developers of renewable energy projects such as wind farms and solar arrays.
It seems truck drivers transporting coal by road to Eskom’s power stations feared they would eventually lose their jobs due to the success of renewable energy projects. Court papers describe CTF as a voluntary association with legal personality comprising approximately 50 companies that transport coal for Eskom.
Not only did the court dismiss the application, it also ruled that CTF must pay the costs of all 38 parties that the association of truckers had dragged into court. The respondents included Eskom, the National Energy Regulator of SA (Nersa), the minister of energy and 27 independent power producers.
CTF based its case on what seems to be a rather flimsy legal issue. It argued that Nersa neglected to take a number of decisions prior to the conclusion of the relevant agreements signed last year and, as such, the agreements should be declared null and void.
It used the same argument in its application to the court that Eskom be interdicted from finalising the latest outstanding agreements between the power utility and the developers of three new projects.
Law firm Webber Wentzel, which represented the 27 so-called independent power producers (IPPs) in the legal battle, says CTF had a clear agenda: “To try to put a stop to the IPP programme.”
The law firm says CTF was once again supported in court by the National Union of Metalworkers (Numsa) and Transform RSA, a group that Webber Wentzel says is linked to the controversial Gupta family, although they were not formally part of the legal proceedings.
“The High Court ruling confirms that the PPAs [power purchase agreements] that were signed last year were in fact entered into lawfully and that the three remaining IPPs are free to sign their agreements,” says Michael Evans, partner at Webber Wentzel.
“Significantly, any investment that was made after the signing of the PPAs is not under threat and the renewable energy programme in SA remains a viable economic opportunity for investors.”
The court ruling makes for interesting reading and gives a clear, short summary of SA’s energy strategy and the process that Eskom and the department of energy follow when considering new agreements with producers of green energy. Read the judgment here.