Medupi, Kusile power stations badly designed - foreign help to sort out Eskom mess

Despite overspending by hundreds of billions of rand on the Medupi and Kusile power stations to alleviate SA's power problems, load-shedding is still with us.
Despite overspending by hundreds of billions of rand on the Medupi and Kusile power stations to alleviate SA's power problems, load-shedding is still with us.
Image: Waldo Swiegers

The government has conceded that the two multibillion-rand new power stations - Medupi and Kusile - were badly designed and constructed and this was at the heart of the current Eskom crisis.

The admission was made by public enterprises minister Pravin Gordhan in parliament yesterday. Gordhan said Eskom is facing problems of a structural, operational and financial nature.

"Fundamentally, the first point that we need to tell the public is that Medupi and Kusile were badly designed and badly constructed and are not performing at optimum levels," Gordhan said.

"We are addressing these issues. I have met with the board yesterday, I've had various interactions today. We are beginning to understand where the problems are in some of the very old power stations."

He said the government had also "taken a new initiative where the board and myself have agreed that we are going to bring in external power station engineers, have an independent audit done on what is exactly going on so that we put Eskom back on track".

Last year, a report by the office of central procurement showed that Eskom was set to overspend a further R52.2bn more on its Medupi and Kusile power stations.

The report showed that the power utility overspent at least R103.3bn at its Medupi project in Limpopo for the financial year ended March 31 2017, from R93.9bn in March 2016. The project's budget was initially pegged at R145bn.

On the other hand, the cumulative cost on the Kusile project in Mpumalanga was R112.4bn in 2017, compared to R95.1bn in March 2016.

The report, submitted to parliament's standing committee on appropriations, said Kusile would overspend by R26.2bn, while Medupi would overspend by R26bn.

Parliamentarians took turns yesterday to blame the electricity crisis on the ANC.

What was meant to be a debate on President Cyril Ramaphosa's State of the Nation Address became a serious interrogation of government efforts in turning around the power utility.

DA leader Mmusi Maimane blamed Ramaphosa for the failings at Eskom. "You have been watching this space as Eskom collapsed . while you talk of tinkering with Eskom to keep the lights on, we do.

"Where the DA governs we are way ahead of the rest of the country in terms of renewable energy readiness," he said.

On Monday, Eskom shocked the nation when it announced stage 4 load-shedding after six further units went down, forcing the system to require 4,000 megawatts of relief.

As the day begun yesterday, Eskom said it would continue with its load-shedding but reduced it from stage 4 to 3. "Despite generating units returning to service as planned, the emergency reserves [diesel and water] are still very low," the power utility said.

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