Eskom tak­ing ac­tion against con­trac­tors

Foren­sic process finds ev­i­dence of sub-stan­dard work and fi­nan­cial col­lu­sion, re­veals Pravin Gord­han

The Mercury - - BUSINESS REPORT - BANELE GININDZA [email protected]

ESKOM is tak­ing ac­tion against con­trac­tors and orig­i­nal equip­ment man­u­fac­tur­ers (OEMs) for fi­nan­cial col­lu­sion and sub-stan­dard work in the con­struc­tion of the Medupi and Kusile power sta­tions, which have con­trib­uted to tripling the costs of the power util­ity, says Min­is­ter of Pub­lic En­ter­prises Pravin Gord­han.

“We are find­ing through a foren­sic process we are un­der­tak­ing that OEMs fell short in the de­sign and qual­ity of work in the grind­ing of coal, fil­ters and boil­ers. There is some hard talk­ing to be done be­cause some­body is mak­ing money from the dou­bling of Medupi costs; we are go­ing to look at who is ben­e­fit­ing,” Gord­han said yes­ter­day.

He added that main con­trac­tors such as Hi­tachi had to an­swer for the poor qual­ity of work, with dou­ble the costs ini­tially set out.

Sub-stan­dard work and equip­ment sup­plied to the two power sta­tions had re­sulted in them yield­ing less than the 2 400 megawatts they were sup­posed to con­trib­ute, Gord­han said.

Con­struc­tion on these two pro­jects started in 2007 and 2008, but might only be fully com­pleted after 2020, ac­cord­ing to es­ti­mates.

“Kusile and Medupi are not ad­e­quately help­ing the pub­lic as they should,” Gord­han said.

Re­cent con­sul­ta­tions had re­vealed that in the past two to three years, there had been a de­cline in the amount of money for low-level and ma­jor re­pairs, wors­ened by the lengthy process to ac­quire parts be­cause in some in­stances they had to be cus­tom built, he said.

A re­port of an in­ves­ti­ga­tion com­mis­sioned in 2015 by Eskom to law firm Den­tons to look into the causes of load shedding, its fi­nan­cial cri­sis and the new build de­lays iden­ti­fied se­ri­ous cause for con­cern re­gard­ing the man­ner in which Eskom awarded con­tracts for the sup­ply of diesel and coal, among other short­com­ings.

The law firm found that some of the con­trac­tors – who ben­e­fited from the nearly R30 bil­lion that Eskom spent on diesel for its open-cy­cle gas tur­bines be­tween 2013 and 2015 – were com­pa­nies that had no foot­print in the in­dus­try and may have been set up by Eskom em­ploy­ees them­selves.

Den­tons also found Eskom might have wasted R200m in just two years be­cause it failed to se­cure the req­ui­site dis­counts from its diesel sup­pli­ers.

Ear­lier this year en­ergy ex­pert Ted Blom told the Na­tional En­ergy Reg­u­la­tor of South Africa of mas­sive over-ex­pen­di­ture on cap­i­tal pro­jects such as Medupi, Kusile and In­gula, es­ti­mat­ing that as much as R1.3 tril­lion was miss­ing from the util­ity.

Among the miss­ing bil­lions es­ti­mated by Blom were R100bn in cost over­runs in Medupi, R100bn in Kusile, R30bn in In­gula, R2bn in Op­ti­mum Coal, R3bn in the Eskom trea­sury and R1bn in the trans­mis­sion unit.

(ANA) | BHEKIKHAYA MABASO African News Agency

ESKOM chair­per­son Jabu Mabuza and Min­is­ter of Pub­lic En­ter­prises Pravin Gord­han at the Eskom Megawatt Park head of­fice in Sun­ninghill.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.