Despite the deal to get three Turkish power ships to successfully dock and start producing 1,200MW of emergency power to South Africa apparently progressing, the company in charge – Karpowership – is facing mounting issues locally, including negative perceptions from the public and trouble with BEE.

The power ship deal has faced massive headwinds in South Africa, with the company admitting to the City Press that its entry into the country has been incredibly bumpy.

The group had initially anticipated docking three of its ships along the South African coastline for a period of 20 years to help buffer the country’s quickly deteriorating power situation after winning the bid for the contract back in March 2021.

However, it has been unable to do so thanks to significant pushback from environmentalists and other stakeholders.

Concerns have been raised about the impact of the ships on the local coastline and maritime environment, and the logic of having the ships docked for 20 years on an emergency basis has been brought into question.

While South Africa is desperate for additional generating capacity right now, in 20 years’ time – if the government’s plans become a reality – the country should have no shortages and no need for the additional power.

The 20-year term also becomes a huge cost factor – something the country can ill-afford.

There is also the matter of South Africa’s carbon emission commitments which need to be considered, where the power ships’ use of gas could push the country beyond its limits.

All of these issues have been and continue to be challenged in court, adding lengthy legal processes to an already delayed project.

Speaking to the City Press over its cold, if not outright hostile, reception in South Africa, the Karpowership business director Mehmet Katmer said the company has been unduly criticised, with most people not understanding the terms of the contracts or how it operates.

He argued that gas energy is not as ‘dirty’ as lobby groups have made it out to be – and also denies that it is a more expensive alternative.

He said that gas emissions are 50% cleaner than coal and 25% cleaner than diesel – both of which are currently being used extensively by Eskom. Further, he noted that the 20-year contract would cost South Africa about R20 billion a year (R400 billion over the full period), cheaper than what Eskom spends.

For example, Eskom is expected to spend close to R30 billion this year burning diesel.

Addressing the lengthy contract, Katmer said the group was willing to renegotiate those terms, although he said it had not been formally approached to do so. Reports earlier this week said that a new five-year contract was being discussed.

Notably, academics estimated that a new, shorter contract would cost the country R15 billion a year – which would appear more favourable than the current terms, given Katmer’s statements. Previous estimations have put the 20-year contract at R230 billion, or just over R11 billion a year.

Regardless, the price point remains a sticky issue – one that is now feeding into yet another problem that is brewing under the surface.

According to a report by the Sunday Times, issues with black economic empowerment (BEE) are now creeping in. A battle is reportedly breaking out over the local BEE partnership for the deal – which could net the ‘victor’ billions of rands.

The BEE partners of Karpowership in South Africa – necessary to score such a big contract in the first place – stand to gain half of the value of the contract. Based on Katmer’s comments, this is a hefty R200 billion over 20 years.

However, while the group already has local partners, it is reportedly shopping around with third parties because of the local delays and the apparent inability of the current partners to overcome them.

The Sunday Times reported that the local partners are pushing back against any attempt to have the BEE partnership usurped by another, while Karpowership said it was looking for partners for the renewables sector.

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Read: Huge boost for power ships in South Africa