R1,5 billion more for flaws

LEPHALALE — Following a front-page article in the Rapport Newspaper dated 25 November, reporting that there are certain design flaws at Medupi and that an additional R1,5 billon will have to be spent in order to rectify the flaws, Mogol Post sought some clarity regarding these problems.

Mogol Post: Can you provide an update on the current number of employees at Medupi and how many will there be left in January 2019?

Medupi: As of the month end of October 2018, contractors’ employees are 11 232. The contractors are demobilising based on the work completed. From the end of November 2018, the forecasted demobilisation figure was 932, for the end of December 2018, the forecasted figure is 503 and for January 2019, the forecasted figure is 1 258, which will be a total of 2 693 by the end of January 2019. Therefore, contractors’ employees are estimated to be 8 539 by the end of January 2019.

Mogol Post: In last Sunday’s Rapport (dated 25 November 2018) it was stated that Eskom admitted that Medupi has “design flaws” and that it will take roughly three to five years to correct the mistakes. Is this true?

Medupi: The performance issues relate to the boiler, turbine, bulk materials handling and Control and Instrumentation (C&I) plant areas.

Current mitigations and proposed solutions, as well as resolution timelines are in place to manage the mentioned performance issues.

Eskom’s contracts with the relevant contractors are specific in terms of the exact contractual requirements as far as the addressing modifications of design relating to performance issues and defects. Various step-in clauses in the contracts allow Eskom to implement the necessary remedies to ensure that contractors are held accountable for the work to be completed as per the contract, without Eskom suffering plant performance and reliability issues and associated financial losses. Approximately five years have been proven normal for any new plant to reach full sustainable reliability levels.

Mogol Post: It is also stated that it is going to cost an additional R1,5 billion to correct the flaws. Is that a fact?

Medupi: Eskom has committed that these funds be made available to fix the design errors. The funds have not yet been allocated.

Mogol Post: What is the estimated date of completion for the Eskom Medupi Project?

Medupi: The expected date of commercial operation for the last unit at Medupi (Unit 1) is May 2020, based on the revised schedule.

Mogol Post: How many employees will be needed to keep the power station running after completion?

Medupi: Generation will need about 1 000 employees. These are broken down as follows: 400 internal employees and 600 contract partner employees that are outsourced (of which about half; meaning 300; are expected to be from Eskom Rotek Industries).

During Planned Outages and Shutdowns an additional average of 1 000 employee will be added.

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