http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.20Change: 0.05
R/$ = 11.22Change: 0.06
Au 1219.41 $/ozChange: 3.15
Pt 1291.00 $/ozChange: 3.00
 
 
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 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|Alstom|Babcock Borsig|Babcock Borsig Services|Bilfinger & Berger|CoAL|Deutsche Babcock|Eskom|Hitachi Ltd|Hitachi Power Africa|Hitachi Power Europe|L&C Steinmüller Group|Mail & Guardian|PROJECT|Project Management|Steinmüller Africa|Steinmuller Construction|Africa|Germany|Japan|South Africa|Lephalale Facility|Medupi Power Plant|R78,6-billion Medupi Power Plant|Boiler Technology|Energy|Equipment|Equipment Manufacturer|Installed Boiler Technology|Maintenance|Services|Steel|African National Congress|Energy Division Of Babcock Borsig|Fabrication|Hermann Brümmer|Power|Robin Duff|Boiler Technology|Installed Boiler |Installed Boiler Technology
Construction|Engineering|Africa|CoAL|Eskom|PROJECT|Project Management||Africa|||Energy|Equipment|Maintenance|Services|Steel||Fabrication|Power||
construction|engineering|africa-company|alstom|babcock-borsig|babcock-borsig-services|bilfinger-berger|coal|deutsche-babcock|eskom|hitachi-ltd|hitachi-power-africa|hitachi-power-europe|lc-steinmller-group|mail-guardian|project|project-management|steinmller-africa|steinmuller-construction|africa|germany|japan|south-africa|lephalale-facility|medupi-power-plant|r786billion-medupi-power-plant|boiler-technology|energy|equipment|equipment-manufacturer|installed-boiler-technology|maintenance|services|steel|african-national-congress|energy-division-of-babcock-borsig|fabrication|hermann-brmmer|power|robin-duff|boiler-technology-technology|installed-boiler|installed-boiler-technology-technology
© 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
Article contains comments
Toshiba’s Westinghouse Electric Company on Monday launched an expedited review application in the South Gauteng High Court challenging Eskom’s decision to award a R4.3-billion contract to Areva, of France, for the replacement of steam generators at the Koeberg...
Article contains comments
Efforts by the Kenya government to increase energy generation by 5 000 MW over the next three years received a major boost following the award of a $2-billion contract to build a coal power plant in Lamu.  Despite allegations of irregular tendering process, the...
Cellular major MTN South Africa has approved two gas-powered generation developments for its Doornfontein (1 MW) and Newlands (6 MW) sites, in Gauteng, based on the success of its 2 MW trigeneration plant, at its Roodepoort headquarters. MTN will expand this...
Article contains comments
More
 
 
Latest News
Protech Khuthele Holdings on Wednesday said, in a cautionary note to shareholders, that, as the failed company unwound, investigations were ongoing into its affairs. The company provided no indication of the completion date.
Private equity investors are increasingly becoming more active in Africa’s bid to narrow the $90-billion a year infrastructure funding gap constraining the continent’s growth. This was according to a survey by the Southern African Venture Capital and Private Equity...
The shortlist of innovations in the Africa Prize for Engineering Innovation was announced on Wednesday, comprising 12 new innovations from seven African countries. The shortlist announced by the UK’s Royal Academy of Engineering (RAEng) included innovations in...
More
 
 
Recent Research Reports
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.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
 
 
 
 
 
This Week's Magazine
The latest TransUnion Vehicle Pricing Index (VPI) contains a number of small, but significant indications that the tide may at last be turning for the beleaguered used car industry. For the third successive quarter, used car inflation has increased on a year-on-year...
The South African new vehicle market is likely to reach around 630 000 units in 2014, down from the 650 000 units recorded in 2013, says Toyota South Africa Motors (TSAM) president and CEO Dr Johan van Zyl. Van Zyl is also president of the National Association of...
Efforts by the Kenya government to increase energy generation by 5 000 MW over the next three years received a major boost following the award of a $2-billion contract to build a coal power plant in Lamu.  Despite allegations of irregular tendering process, the...
Using crafty wordplay on a well-known Internet meme, brilliant South African-born US entrepreneur and businessperson Elon Musk announced that Tesla Motors would not initiate patent lawsuits against anyone who, in good faith, wanted to use its technology. Instead,...
August new vehicle sales declined by 1.4%, to 55 722 units, compared with the same month last year. Assisted by the car rental market, the South African new passenger car market, at 37 953 units, contracted by 1 047 units, or 2.7%, compared with August last year.
 
 
 
 
 
 
 
 
 
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