Heads will roll: Warns Gigaba at Medupi

The Medupi Power Station, under construction in Limpopo, must feed its first set of power to the national grid before the end of this year, otherwise heads will roll.

This was the command issued by public enterprise minister Malusi Gigaba during an inspection tour of the Medupi construction site this week. “We are not going to tolerate any further delays. South Africa cannot afford another delay,” said Gigaba.

The command ups the pressure against the principal players and mainly the state owned power utility Eskom and its executives. It also threatens severe penalties against primary contractors of the project, Hitachi and Alstom.

Gigaba’s comments came amid worrying signs that the commissioning of the first unit from massive coal fired power station will be delayed one more time, placing the national grid under severe pressure. Another delay will certainly see further escalation of the project costs. When construction began in 2007 Medupi the costs of the project were set around R80bn and the first unit of the six was scheduled to produce power in 2012 and was postponed to December 2013. Costs are now estimated to be around R125bn with other observers placing the figure around R150bn. Medupi is to have six units each with a capacity of 800 Megawatts per unit. Total capacity was set at 4800 megawatts.

Eskom CEO Brian Dames surrounded by officials including the minister of public enterprises Malusi Gigaba

Eskom CEO Brian Dames surrounded by officials including the minister of public enterprises Malusi Gigaba

Gigaba said Eskom was engaged in a process of establishing the extent of costs overrun of the project Medupi and will in due course advise on this front. In recent weeks there has been speculation that Eskom CEO Brian Dames is feeling the pressure and may quit. Delays on the project and costs overrun were linked to this speculation.

Dames chided the speculation aside and focused on the job. He said the December schedule was going to be tight given challenges at play. Dames said Eskom would do whatever it takes to meet the December deadline.

Gigaba dismissed the speculation around Dames as an unfounded rumour during his presentation at the Medupi site. But he did crack the whip.

“Notwithstanding the milestones achieved, the project has not been without its challenges some of which I have already alluded to in the introduction. These range from:

  • contract management
  • engineering coordination and poor technical performance with weak supervision
  • lack of strong industrial relations management
  • poor community relations and other stakeholder management.

Added Gigaba “In response to the obligation I placed on Eskom to deliver the first power in December 2013, I have received commitment from Eskom and its contractors that all the necessary resources will be made available to make sure that the project is delivered on time”.

“This will certainly be a mammoth task which will require all hands on deck. I, again, to reiterate the statement I made a few weeks ago that I am adamant that this date be met and that the country does not have the luxury of time to brook any delays”.

“Failure to meet this deadline of December 2013 for first synchronisation will result in tough penalties being imposed on any party responsible for such delay”.

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