Tshwane metro says it has not abandoned its legal showdown against the National Energy Regulator of SA (Nersa) to challenge it for granting Eskom a licence to supply power to a R30bn property development in the east of Pretoria.
Nersa in 2023 approved a power supply licence to Eskom for the Mooikloof Mega City development, under construction by Balwin Properties in partnership with government, to build 50,000 residential units. The development is expected to cost R30bn and result in a total economic impact of R75bn.
The Tshwane metro accused Nersa of acting unlawfully in awarding the power utility the licence and contended it would dent the municipality’s chances of cashing in on R1.5bn revenue a year.
The municipality’s case before the Pretoria high court was set for two days and on August 22 the court delivered an order directing the parties to resolve the matter through an intergovernmental resolution process. Tshwane metro agreed to the dispute resolution method despite waiting two years to have its day in court.
City of Tshwane spokesperson Lindela Mashigo told Business Day the metro agreeing to an out-of-court resolution was not a sign of backing out of its case against Nersa.
“This matter is still pending in court and is not yet finalised. The affected parties will be engaging to see if the matter can be resolved through a facilitated process,” he said. “This is in consideration that parties can take long in litigation when issues can possibly be resolved through a mediation process. In this instance the parties are giving each other space to consider a possible solution.”
The parties have to appoint a retired judge to facilitate the process. The court listed three names for the parties to choose from: judges Hans Fabricius and Phineas Mojapelo and retired Constitutional Court justice Baaitse Nkabinde.
The parties were given 10 days to appoint the judge. Mashigo said last week, when asked whether the appointment had been made, that “the process is unfolding”.
The intergovernmental process has a deadline of November 17. Should the parties not find middle ground the litigation will proceed.
The municipality based its case in the high court on section 155 of the constitution, which stipulates a municipality has exclusive municipal executive and legislative authority in its area.
In his court papers, municipal city manager Johann Mettler conceded the municipality suffered from power supply constraints but said it made plans to cater for the huge development. “The city informed Nersa the current bulk electricity supply in the eastern suburbs of Tshwane is severely limited. However, the municipality is actively addressing this issue by implementing plans to ensure an adequate supply of bulk electricity,” his court papers read.
There have been several upmarket property developments in the east of Pretoria in recent years that at times suffered long blackouts. The causes of the blackouts include persistent cable theft and grid constraints.
Nersa and Eskom opposed the city’s case and relied on provisions of the Electricity Regulation Act in their rebuttal.
Nersa electricity regulation head Nhlanhla Gumede disputed Tshwane’s assertion that the project was built on land under its power licence. “It is true that farm 375-JR [Rietfontein farm] appears in the city’s licence. But the licence could not and did not grant the city exclusivity in respect to the whole farm of 375-JR despite that it compromises portions some of which were undeveloped when the city’s licence was granted,” Gumede’s affidavit reads.
“The other two farms are not designated as the city’s area of supply. Therefore the declaratory order sought by the city, which carries the consequence of having the entire Mega City as its area of supply, has no factual nor legal basis.”
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.