http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.39Change: -0.08
R/$ = 10.74Change: -0.06
Au 1283.82 $/ozChange: 1.57
Pt 1457.50 $/ozChange: -3.50
 
 
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|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|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|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 Regulation News
POWER SUPPORT Sanea suggests that the private sector should be included with greater momentum to provide additional power supply
Although additional baseload power stations will be required to combat the shortage in the electricity supply industry in South Africa, the exact time at which the next new baseload power station would be commissioned, after the commissioning of the current new build...
Creamer Media’s Electricity 2014 report provides insight into South Africa’s electricity generation, exploring the issues of State-owned power utility Eskom's generated power, coal supplies, electricity tariffs and demand-focused initiatives, as well as the...
Article contains comments
Following the July 2013 launch of a public consultation phase for the formulation of South Africa’s envisaged Integrated Energy Plan (IEP), The Department of Energy (DoE) has advised that the final plan will be published by March next year. “The final IEP will be...
Article contains comments
More
 
 
Latest News
Updated 2 hours 10 minutes ago Human Settlements Minister Lindiwe Sisulu was considering the formation of a Women Construction Bank to focus on financing women-led cooperatives and construction companies involved in community infrastructure and human settlements projects. Delivering a keynote...
Updated 2 hours 34 minutes ago The seasonally adjusted Kagiso Purchasing Managers’ Index (PMI) has contracted for the fourth consecutive month, signalling the manufacturing sector’s continued subpar performance. The index “expectedly” fell from 46.6 in June to 45.9 index points in July,...
Updated 2 hours 47 minutes ago National carrier, South African Airways (SAA), is adding more travel options on the African continent. In a statement, on Thursday, SAA said it was increasing flights on the Johannesburg-Lagos route, where it will offer eight frequencies per week effective from 1...
More
 
 
Recent Research Reports
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.
Real Economy Insight: Steel 2014 (PDF Report)
This four-page brief covers key developments in the steel industry over the past 12 months. It provides an overview of the global and South African steel and stainless steel markets, South Africa’s major steel producers and events that have shaped these markets.
 
 
 
 
 
This Week's Magazine
South African construction company Group Five says work on the rehabilitation of the 800 km stretch of the Plumtree–Mutare highway, in Zimbabwe, should be completed by the end of this year. Giving evidence before the Parliamentary Porfolio Committee on Transport...
SINGLE EXPERIMENT An artist’s impression of OCO-2 in orbit
The Space Operations division of the South African National Space Agency (Sansa) revealed on July 17 that it had supported the successful launch of the US National Aeronautics and Space Administration’s Orbiting Carbon Observatory-2 (OCO-2) satellite on July 2. The...
RICE TAG The real costs of operating Rea Vaya have become clear
Phase 1A of Johannesburg’s Rea Vaya bus rapid transit (BRT) system should carry around 42 000 people a day, while it was been expected that Phase 1B, rolled out last year, would add another 60 000 daily passengers. However, the entire system is currently carrying...
A stormwater project in Bedforview, east of Johannesburg, has stalled for eight months after project managers in the Ekurhuleni municipality resigned and municipal managers were placed on special leave without designating replacements. Construction to reinforce the...
The design of the Beit Bridge border post is the biggest impediment to efficient freight movement between Zimbabwe and South Africa, says Cross-border Road Transport Agency CEO Sipho Khumalo. Beit Bridge is the busiest border post in Africa. A research study on the...
 
 
 
 
 
 
 
 
 
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