Dec 07, 2007
Hitachi Power Africa assures relationship with ANC-linked company is above boardBack
© Reuse this Power-equipment vendor Hitachi Power Africa has defended its relationship with Chancellor House, which is said to have strong ties with the ruling African National Congress (ANC) and has even been described as an ANC business front, stressing there is nothing improper about the relationship.
The R20-billion contract is for six 800-MW utility steam generators for the Medupi power station, which is being built at a cost of R78,6-billion, at a site near Lephalale, in Limpopo province. The consortium is also in line to supply a similar offering for the R80-billion-plus Project Bravo, which is to be built almost simultaneously at a site near Emalahleni, in Mpumalanga. This tender should be awarded before the end of the month.
In a reply to emailed questions, Hitachi Power Africa MD Robin Duff told Engineering News that the relationship with Chancellor House was developed in a bid to deepen its “local knowledge” and that Chancellor House had paid cash for its shares. Duff refused to comment on the value of the payment, describing it as “proprietary information”.
Duff acknowledged that it was aware that Chancellor House has political connections when concluding the black economic-empowerment transaction, but asserted that this was the case “with most other empowerment entities”. He revealed that Chancellor House’s T M Mokoena was a director of Hitachi Power Africa, with M Net-sianda as an alternate director.
Stressed, too, was Chancellor House’s advisory role and the fact that it played no direct role in negotiations with Eskom for a recent contract. “Their role is as investor and adviser on local issues such as skills development, empowerment, and socioeconomic initiatives,” Duff elaborated.
Also placed into context was the long-standing historical relationship between Eskom and the under- lying companies, which currently fall under Hitachi Power Africa.
Through a series of mergers and acquisitions, which saw Steinmuller bought by Babcock Borsig in 1999 and the energy division then sold to Hitachi in 2003, Hitachi Power was the current owner of all the know-how and South African references of the former L&C Steinmuller group.
This included boiler installations at the Majuba, Tutuka, Duvha and Kriel power stations, as well as the majority of the boilers installed at petrochemicals group Sasol, which were engineered and supplied by Deutsche Babcock.
“Hitachi Power thus has a local boiler reference base of close to 20 000 MW. We never lost touch with Eskom and discussions about Eskom’s expansion plans have been ongoing since 2004,” Duff explained, asserting, too, that Hitachi Power Europe currently ranked among the three leading suppliers of utility boilers internationally.
Duff stressed, too, that Hitachi was a strong supporter of Eskom’s aspiration to build local manufacturing capacity around its big build programme, which already involved a pipeline of work worth R300-billion, and that the group would invest in new manufacturing facilities.
This investment would include facilities to produce boiler pressure parts, tube bundles, ducting and coal bunkers and piping. It would also involve the procurement of large cranes, the creation of apprentice training centres and other enterprise development initiatives.
“Planning for the major investments is advanced and will be implemented as from 2008,” he concluded.
Several attempts to garner comment from Eskom proved unsuccessful.
Edited by: Martin Zhuwakinyu© Reuse this Comment Guidelines (150 word limit)
Other Electricity News
Power utility Eskom said it would extend power cuts to 2 000 MW of electricity from 12:00 to 22:00 on Friday due to a shortage of generating capacity. The cash-strapped State utility, which has been forced to reduce electricity supply in Africa's most advanced...
Article contains comments
The changing role of the African electricity consumer is held up in a new Deloitte report as a potentially “disruptive” trend for the sub-Saharan African power industry. Africa infrastructure and power leader Shamal Sivasanker argues that consistent growth in region...
Recent Research Reports
Steel 2015: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2015 report provides an overview of the key developments in the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon...
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
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.
This Week's Magazine
While economic forecasts for the African continent are most favourable, African airlines may not be able to benefit from the expected growth in the region’s gross domestic product (GDP), International Air Transport Association VP: Africa Raphael Kuuchi has warned....
The Automotive Production and Development Programme (APDP) will need to change substantially post 2020, says Metair Investments South African operations COO Ken Lello. “We must not make tweaks. We have to change. What we are doing is not sustainable.”
Banking group Absa’s forecast is for the rand to end the year at around R13 against the dollar, weakening further to R13.50 by 2016, says Absa sectoral analyst Jacques du Toit. He warns that possible interest rate hikes in the US may see capital being pulled from...
The Dispute Resolution Centre at the Bargaining Council for the Civil Engineering Industry (BCCEI) is now open to handle party-to-party disputes. The BCCEI represents the interests of all level four to nine Construction Industry Development Board companies.
Communications technology firm Ericsson sub-Saharan Africa head Fredrik Jejdling says the company’s commitment to sustainability and corporate responsibility has been integrated into all facets of its operations, which has provided it with sustainable revenue...