http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.06Change: -0.14
R/$ = 11.66Change: -0.12
Au 1213.36 $/ozChange: -4.14
Pt 1189.50 $/ozChange: -1.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Letters Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Dec 05, 2007

Hitachi and Steinmüller at odds over SA boiler ‘reference' sites

Back
Construction|Engineering|Africa|CoAL|Design|Eskom|PROJECT|Project Management|Africa|Energy|Equipment|Maintenance|Services|Steel|Fabrication|Power
Construction|Engineering|Africa|CoAL|Design|Eskom|PROJECT|Project Management|Africa|Energy|Equipment|Maintenance|Services|Steel|Fabrication|Power
construction|engineering|africa-company|coal|design|eskom|project|project-management|africa|energy|equipment|maintenance|services|steel|fabrication|power
© Reuse this



A sharp difference of opinion has emerged between Hitachi Power Africa and Steinmüller Africa over whether Hitachi can rightfully appropriate as ‘references' the 20 000-MWe of boiler technology that has been installed in South Africa over the last number of decades.

The dispute arose following an article published in Engineering News in which Hitachi Power Africa MD Robin Duff sought to clarify its relationship with Eskom and with Chancellor House, its 25% black economic empowerment partner, which is said to have strong ties to the ruling African National Congress.

Duff defended the relationship with Chancellor House, after leading national weekly the Mail & Guardian raised questions about whether the link played any role in the November 13 award by Eskom of a R20-billion boiler contract to a consortium comprising Hitachi Power Africa and Hitachi Power Europe (Germany). The contract for the Lephalale facility was, in fact, the biggest in Eskom's history and could well be followed by a similar sized contract for ‘Project Bravo', to be built nearly simultaneously at a site near Emalahleni, in Mpumalanga.

In his clarification, Duff noted that, while it was Hitachi Power Africa's first material contract with Eskom, the company's relationship spanned many decades, given that the installed boiler technology was now under the ownership of Hitachi.

He explained: "Through a series of mergers and acquisitions (Steinmüller was bought by Babcock Borsig in 1999 and the Energy Division of Babcock Borsig was bought by Hitachi in 2003), Hitachi Power is now the owner of all the know-how and references of the former L&C Steinmüller Group, which includes Majuba, Tutuka, Duvha and Kriel boilers, as well as the majority of the boilers installed at Sasol, which were engineered and supplied by Deutsche Babcock. Hitachi Power thus has a local boiler reference base of close to 20 000 MWe."

But this is disputed by Steinmüller Africa MD Hermann Brummer, who, in a letter to Engineering News, asserts the following: "While it is true that Hitachi Power Europe, with its subsidiary Hitachi Power Africa, a new entrant in the South African market, acquired the know-how as a result of the acquisitions referred to, ownership of know-how cannot be considered a sufficient basis for a claim of ‘references'."

Brummer stressed, too, that Steinmüller Africa has been responsible for the supply, erection and commissioning of the entire boiler island for most of Eskom's coal-fired stations. "As the original equipment manufacturer of these plants, Steinmuller Africa in fact has the ‘local boiler reference base of close to 20 000 MWe," he adds.

It was confirmed by both Brummer and Duff that there is no relationship between Hitachi Power and Steinmüller, with Hitachi Power owned by Hitachi Ltd, of Japan, and Steinmüller by Babcock Borsig Services, a subsidiary of Bilfinger & Berger, Germany.

It also emerged that Steinmüller Africa has participated in competing consortia for the Medupi contract, with Steinmuller having been part of the joint bid with Alstom, which eventually won the R13-billion turbine contract for the R78,6-billion Medupi power plant.

However, in a response to Engineering News questions Duff continued to assert that Hitachi Power Africa had a right to claim the references.

Duff elaborates: "The former L & C Steinmüller (LCS), Germany, engineered the 20 000 MW of Eskom's installed fleet in question. LCS's subsidiary, Steinmüller Africa, handled project management and local manufacture of the LCS scope. Steinmuller Construction, a subsidiary of Steinmuller Africa, did the erection of the boilers. At no time did Steinmuller Africa design any Eskom boilers and therefore is not the owner of any know-how or references."

He adds that "at most" Steinmüller Africa has the right to use the built documentation from the LCS boilers constructed in the 1970's and 1980's and "nothing more".

It should be stressed, though, that Steinmüller Africa did not call into question the integrity of the Eskom tender process for Medupi, with Brummer emphasising its continued strong relations with Eskom and a desire to maintain and strengthen that relationship.

"Steinmüller recently re-established its fabrication facilities and continues to be a competitive player in the new capacity build market, while remaining committed to meeting Eskom's plant maintenance and enhancement requirements," Brummer stresses.

However, it is also interesting to note that Hitachi Power Africa selected construction and engineering group Murray & Roberts as its partner for the structural steel fabrication and erection, as well as mechanical installation works for the Medupi boiler package. Murray & Roberts has stated that the contract for the six 800-MW units are valued at about R 7-billion over a period of seven years.

 


Edited by: Terence Creamer
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Electricity News
Eskom power stations
While State-owned power utility Eskom was unable to cut off electricity supply to some of its neighbouring trade partners, it was able to reduce energy exports by 10% when load shedding was implemented locally. The Department of Public Enterprise explained that Eskom...
Through its climate investment fund (CIF), the African Development Bank (AfDB) now supports one regional and 25 national investment plans across Africa.
China’s investment in African resources remains at a relatively early stage and is likely to increase further over the next decade, despite the economic slowdown in the world’s second-largest economy, reports South African financier Standard Bank. China’s economy...
More
 
 
Latest News
Salani Sithole
International consulting engineering company Royal HaskoningDHV (RHDHV) has appointed Salani Sithole as South African MD, effective March 1. Sithole has been with the company for six years and, prior to joining RHDHV, held various positions in engineering consulting,...
The Gauteng Provincial Government has outlined plans to develop a handful of “mega” human settlements as part of an ambitious long-term housing development strategy aimed at narrowing the housing backlog, with plans afoot to replace informal settlements with...
Eskom power stations
While State-owned power utility Eskom was unable to cut off electricity supply to some of its neighbouring trade partners, it was able to reduce energy exports by 10% when load shedding was implemented locally. The Department of Public Enterprise explained that Eskom...
More
 
 
Recent Research Reports
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
 
 
 
 
 
This Week's Magazine
National flag carrier South African Airways (SAA) is in an advanced stage of renegotiating its deal with European airliner manufacturer Airbus to acquire A320 single-aisle (or narrow body) aircraft. The aim is to replace ten of the aircraft still on order with five...
Worldwide, the main thrust in the ports industry over the past decade or more has been to increase efficiency. Traditionally, ports have been run by engineers and mariners and, in the past, increasing a port’s capacity was achieved by expanding the harbour. “That has...
What do you do when an elephant has a toothache? You call Dr Gerhard Steenkamp from the University of Pretoria’s (UP’s) faculty of veterinary science, Onderstepoort, one of only two elephant ‘dentists’ in the world.
The 2015 Sanlam/Business Partners Entrepreneur of the Year (EOY) competition was launched earlier this month in Johannesburg, with the main focus on creating and inspiring entrepreneurs to create jobs and boost the economy.
In a recent letter to the editor that I sent to Engineering News (Concerns regarding South African portion of Square Kilometre Array) and in a follow-up article elaborating further (We must start preparations to build our own synchrotron light source), I stated my...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $96 Close
Subscribe Now for $96