They don’t have the required skills and knowledge to do the jobs, laments Eskom
CONTRACTORS brought in to execute some of Eskom’s big capital expenditure projects did not have the necessary knowledge and skills to carry out major projects in South Africa, the power utility has said.
The poor execution of major projects, along with cost escalations and schedule slippages at a time when South Africa desperately needed additional capacity, call into question the capability of some of the contractors and Eskom’s responsiveness to the problems the utility had flagged.
Eskom has laid the blame for the delay of its Medupi power station in Lephalale, Limpopo, partly at the door of the contractors.
“Specialised welding on the boiler was of poor quality, the failure of some control and instrumentation factory acceptance tests and substantially lower than anticipated productivity resulted in both cost and schedule movements,” Eskom said.
Business Report has seen a 2013 PricewaterhouseCoopers (PwC) report on welding defects at the Medupi power station. The welding problems saw Eskom issue a stop work order at the power station in March 2012.
The report partly lifts the lid on the circumstances which led to the delay in the commissioning of the power station’s first unit, Unit 6. According to Eskom, the initial synchronisation of the unit was November 2012. But the unit started feeding power into the grid only in March last year.
Non-compliance
The report also shows that Eskom took long to resolve problems it had identified with the boiler contract. For instance, when the PwC report was finalised in April 2013, the non-compliance report which Eskom had issued had been unresolved for three years.
“Eskom recognised from the beginning of the new-build programme that there were insufficient competent engineering practitioners to execute Medupi and Kusile return-toservice units and gas projects at the same time. A strategy was formulated to contract-in large and multinational engineering companies to assist Eskom.
However, the roles and responsibilities were not ideally defined. As a result, the decision-making and processes to be followed sometimes took too long, and in some cases resulted in the duplication of effort,” Eskom said.
As far back as January 2009, there were problems with Medupi’s boiler contract, which ESKOM on Friday signed a R6 billion loan facility from French development finance company, Agence Française de Développement (AFD) for the power utility’s investments in the extension and reinforcement of its power transmission grid.
Eskom has been raising money to strengthen its transmission network as it is required to accommodate additional capacity from renewable energy technologies. Last year it received a $1.34bn loan from the African Development Bank for investment in
was executed by Hitachi Power Africa, a company whose participation in Eskom projects raised controversy because of its close links to the ANC’s investment arm, Chancellor House.
In March 2012, Eskom brought in an external assessor, Werner Kessel, to conduct a site visit at Medupi to establish the amount of work and schedule time it would take to achieve a