Eskom culprits to be held liable — Gordhan
Minister says president will make an announcement on Thursday aimed at reassuring investors
Public enterprises minister Pravin Gordhan on Wednesday told parliament’s public enterprises committee that he intends to hold accountable those responsible for the raft of problems emerging at Eskom’s mega-power stations Medupi and Kusile.
The coal-fired power stations, which are still under construction, were intended to alleviate SA’s tight electricity supply system. But cost and time overruns and design and technical problems mean that only four of 12 units have been completed, which operate at about 40% to 50% efficiency.
Eskom’s problems weakened interest in SA government bonds and the rand on Wednesday, with the yield on the benchmark government bond due in December 2026 weakening to a three-week low. Despite riskon trade, the rand was the worst-performing emergingmarket currency.
President Cyril Ramaphosa would make an announcement on Thursday aimed at reassuring investors, Gordhan said. 95% Eskom of the supplies’ country s more electricity. than With debt of more than R400bn, which it cannot afford to service, it is seen as the biggest threat to government finances.
Gordhan said he had been told by Eskom that the design of Medupi had been changed midstream, resulting in design and technical flaws, which impeded its operation.
Eskom recently informed the National Energy Regulator of SA of substantial design and technical flaws in the boilers, including that the spray water system cannot adequately cool the boilers; the ash collection system is inadequate, causing excessive ash accumulation blockages; and the coal mills, which pulverise the coal before it goes into the burner, do not meet technical specifications.
These and other design and technical problems cause the new units to frequently trip and have created an excessive maintenance load.
“It is crucial that we understand what happened at Medupi. There are some people who project themselves as angels,
but we need to put together a picture of who was responsible,” Gordhan said.
He said litigation “would certainly follow”, once it had been established what had happened.
The acting director-general of public enterprises, Thuto Shomang, said so far R300bn had been spent on Medupi and Kusile, and the department expected that “many more billions would still be spent”.
When construction began, it was anticipated that Medupi would cost R69bn and Kusile R80.7bn.
Gordhan undertook to provide the committee with a report on the two plants by mid-March.
He also pointed out that the average age of the remainder of Eskom’s fleet of 18 power stations was 37 years, which was why “Medupi and Kusile were so important, as they were supposed to be the replacements”.
Neglected maintenance has led to serial plant breakdowns. When demand exceeds the available supply of power, Eskom is forced to drop customers from the grid to prevent it from tripping. SA is expected to enter its fifth consecutive day of load shedding on Thursday.
Italian utility Enel has been asked by the government to urgently provide two to three senior coal-power station engineers to work with Eskom over the next 10 days. “Their task will be to determine why we are having these breakdowns; do we have the right competencies at Eskom; is the maintenance work being done of the right quality; and how do we get more medium-term solutions to the problems,” he said.
In the past 48 hours, the government has attempted to contact experienced former Eskom engineers for assistance.
“It is fascinating how many of them are in Philippines or Indonesia, or in many other countries, offering their experience elsewhere in the world.
“Loss of senior skills to Eskom is not a small matter, and one that will be receiving a lot more attention.” State capture had pushed good people out of institutions such as Eskom or caused them to leave, he said.