South African government will expropriate land for power lines

The South African government will expropriate land for public purposes to roll out new transmission lines across the country as part of its efforts to enable new generation capacity to come online.

This is part of the government’s R440 billion project to roll out 14,000 km of transmission lines and more than 170 substations in the coming decade.

These pieces of infrastructure are vital for South Africa’s continued energy security as they will enable new generation capacity, particularly renewables, to come online.

South Africa’s electricity grid has traditionally been focused around the central and northern provinces, where most of the generation capacity and demand have been concentrated.

However, new renewable energy is often located in the country’s Cape provinces, which have the best conditions for these technologies.

This requires an extensive overhaul of the grid to enable these projects to connect and transfer their electricity to demand centres in Gauteng.

Electricity Minister Kgosientsho Ramokgopa told the National Council of Provinces that the government will use its ability to expropriate land for public purposes to accelerate this rollout.

Ramokgopa said that one of the major challenges for the project was the inability of the government to obtain the right of way from landowners whose land the transmission lines would criss-cross.

In particular, these transmission lines will go through farmland in far-flung parts of the country, with Ramokgopa saying the government has had difficulty in negotiating with farmers in recent years.

He also warned that the extensive project, vital for South Africa’s energy security, could be slowed down by landowners demanding ridiculous sums of money for their land.

“We will expropriate,” Ramokgopa said. He made it clear that the government will undertake all the consultations required by law before doing so.

Ramokgopa said the Department of Public Works had already set up a committee for expropriation to handle the consultations.

South Africa needs to build around 1,500 km of transmission lines a year for the next decade to complete its ambitious grid overhaul. Currently, the country only builds around 400 km annually.

Eskom chairman Mteto Nyati has estimated that it will require around R390 billion worth of investment to complete the plan.

He has admitted that Eskom does not have that financial might on hand, with the government and the utility requiring private-sector investment to complete the rollout.

Expropriation without compensation unlikely

Law firm Cliffe Dekker Hofmeyr (CDH) has previously said that the utility will not be able to expropriate land without compensation using the new Expropriation Act.

The South African government will have to acquire large swathes of land to complete its ambitious rollout of transmission infrastructure, but it will not be easy.

CDH’s Jackwell Feris and Charles Green explained that an expropriating authority, in this case, the state through the Department of Public Works, can only expropriate for nil compensation after considering all relevant circumstances.

This is controversial as it gives the expropriating authority the ability to offer nil compensation for land expropriation in certain circumstances, including public interest purposes.

Feris and Green explained that the 2024 Expropriation Act makes a critical legal distinction between the two grounds for expropriation: public purpose and public interest.

Public purpose relates to expropriation for a specific public use. This includes the development of tangible public infrastructure like roads, schools, dams and energy transmission lines.

In contrast, public interest is defined more broadly to include the nation’s commitment to land reform and providing equitable access to natural resources to address the results of past racial discrimination.

Feris and Green said the Expropriation Act’s stipulations around nil compensation are not a blanket policy and are strictly limited.

For example, the Expropriation Act states that it may be “just and equitable” to pay nil compensation only when land is expropriated in the public interest.

Therefore, nil compensation is not an option for land expropriated for a public purpose, such as for building transmission lines.

“It seems from the Expropriation Act that an expropriating authority or the court must consider all relevant circumstances and ensure the outcome is fair,” they said.

The Expropriation Act also lists specific, non-exhaustive examples where this might apply, including:

• Unused land held purely for speculative purposes
• State-owned land that an organ of state is not using for its core functions
• Land that has been abandoned by the owner
• Where the property’s market value is less than or equal to the state’s direct investment in it

Feris and Green reassured landowners that, once it comes into effect, the Expropriation Act will provide a clear legal framework.

They said that, for landowners and others affected by the development of infrastructure like energy transmission lines, the position is clear.

Firstly, expropriation for such projects falls under “public purpose”, not public interest. Therefore, the provisions for “nil compensation” do not apply.

This means affected parties will be entitled to just and equitable compensation as determined by the Expropriation Act.

“Any attempt to expropriate land for infrastructure under the ‘public interest’ banner to avoid payment would be legally flawed and subject to legal challenge and judicial review,” they said.