Eskom ordered to pay Aveng R40m after row over power station railway

Majuba power station in Mpumalanga is Eskom's second biggest.
Majuba power station in Mpumalanga is Eskom's second biggest.
Image: Eskom

The high court in Johannesburg has ordered Eskom to pay R40m to construction company Aveng for its work on a rail yard and coal offloading facility at Majuba power station in Mpumalanga.

Aveng, which was awarded the contract in 2013, lodged the claim earlier this year after Eskom refused to comply with the instruction of an independent adjudicator that it should hand over the disputed amount.

Eskom disputed liability for the payment, saying making it would contravene an agreement with Aveng that it was conditional on Treasury approval and compliance with the utility's internal corporate governance processes.

It said the adjudicator, Ian Massey, was not told about the full terms of the agreement.

But acting judge JJ Reyneke disagreed and ordered Eskom to pay Aveng R40,087,353.06, plus interest and the construction company's legal costs.

According to Eskom’s website, construction of a railway to deliver coal to Majuba was part of a move away from road transportation.

Once commissioned, railways to Majuba and Tutuka power stations will transport about 21 million tonnes of coal annually from Ermelo.

The scope of work for Aveng was stated as construction of the bulk earthworks, layer works, bridges and culverts, with Aveng Rail accountable for the construction of the railway line and the overhead power lines.

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