Aug 21, 2012
Medupi, Kusile overruns should be probed, NPC commissioner assertsBack
Eskom|China|South Africa|Taiwan|MW Taichung Plant|University Of Cape Town Graduate School|Energy-policy Academic|Anton Eberhard
© Reuse this
The projects would be the third- and fourth-largest coal plants in the world, with Kusile set to add 4 800 MW and Medupi 4 764 MW worth of capacity between late 2013 and 2018 – only the 7 100 MW Taichung plant, in Taiwan, and the 5 000 MW Waigaoqiao, in China, are larger.
Eskom expects Medupi to cost R91.2-billion to complete and Kusile R118.5-billion (both figures exclude interest during construction).
However, NPC commissioner Professor Anton Eberhard, of the University of Cape Town Graduate School of Business, argued that cost visibility remained poor, while it was also unclear how far the current budgets exceeded initial estimates.
That said, he argued that the enquiry should not be premised on reversing the implementation of the projects. Rather, the objective should be to build greater accountability within State-owned companies on how capital expenditure was conceptualised, managed and funded.
Addressing a conference on economic regulation, hosted by the National Energy Regulator of South Africa, Eberhard said there was currently insufficient regulatory oversight and control over large capital expenditure programmes, notwithstanding the fact that these lay at the heart of the country’s recent power price increases.
He argued that an enquiry could yield planning and investment lessons and stimulate strategies that encouraged greater diversity and innovation and possibly incremental rather than mega projects.
Eberhard’s statements came as Eskom FD Paul O’Flaherty was updating lawmakers on the status of Eskom’s build programme, as well as some of the challenges that the programme had confronted.
The presentation showed that the utility still needed to spend R323-billion between April 1, 2012, and March 31, 2018, to complete Medupi, Kusile and Ingula, as well as to add transmission and distribution infrastructure.
O’Flaherty said that a combination of factors relating to the civil engineering and boiler aspects of the Medupi project had resulted in a 20-month delay and that the first unit was expected to be introduced in December of 2013.
The first Kusile unit would be commissioned in December 2014 and had been delayed owing to funding difficulties, which were now in hand.
O’Flaherty said the reasons for the cost increases were understood and that lessons had been learnt, which would help Eskom in future projects.
“Good progress has been made, but many serious risks, including contractor performance, will need to be carefully managed,” he told lawmakers.
Edited by: Creamer Media Reporter© Reuse this Comment Guidelines
Other Construction News
Updated 2 hours 57 minutes ago Despite an uptick in year-on-year manufacturing output, the outlook for the manufacturing sector remained subdued, banking group Nedbank’s economic unit said on Tuesday. Against the market consensus of a 2.1% contraction and a 3.3% decline in September, Statistics...
Updated 4 hours ago Airline passenger demand was expected to rise more than 30% in the next four years, the latest report by the International Air Transport Association (Iata) revealed on Tuesday. The Iata Airline Industry Forecast 2013 to 2017 showed that, by 2017, there would be a...
Updated 4 hours ago Following her surprise resignation earlier this week, ArcelorMittal South Africa CEO Nonkululeko Nyembezi-Heita has been appointed chairperson and nonexecutive director of the JSE, replacing outgoing chairperson Humphrey Borkum. Nyembezi-Heita, who had served as...
Recent Research Reports
Defence 2013: A review of South Africa's defence industry (PDF Report)
Creamer Media’s 2013 Defence Report examines South Africa’s defence industry, with particular focus on the key players in the sector, the innovations that have come out of the defence sector, local and export demand, South Africa’s controversial...
Road and Rail 2013: A review of South Africa's road and rail infrastructure (PDF Report)
Creamer Media’s Road and Rail 2013 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...
Liquid Fuels 2013 (PDF Report)
Creamer Media’s 2013 Liquid Fuels report examines South Africa’s liquid fuels market, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing,...
Projects in Progress - Second Edition (PDF Report)
Creamer Media’s second Projects in Progress supplement considers some of the major project developments under way, including high-profile energy and transport projects, as well as a few of the lower-profile public and private developments. What remains apparent is...
Water 2013: A review of South Africa’s water sector (PDF Report)
Creamer Media’s Water 2013 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.
Canadian Mining Roundup for June 2013 (PDF Report)
The June 2013 roundup includes details of the development of TSX-V-listed Aldridge Minerals’ flagship Yenipazar polymetallic project, in Turkey; the Canadian Nuclear Safety Commission’s renewal of Cameco’s uranium mining licence pertaining to the Cigar Lake...
This Week's Magazine
Mitsubishi Motors South Africa (MMSA) has introduced a 4x2 derivative of its Pajero Sport sports-utility vehicle (SUV), which will give it access to a substantial slice of the full-size SUV market, where it will compete with the likes of the Ford Everest, Chevrolet...
South African Energy Minister Ben Martins has affirmed that the government wants the country to be globally competitive in the nuclear sector. "Our responsibility has always been ... to ensure that, in nuclear energy, South Africa can compete with the rest of the...
Mercedes-Benz South Africa (MBSA) president and CEO Dr Martin Zimmermann describes the new S-Class as “a special place to be”, with the car creating a sense of “wellness” once you are seated inside the German brand’s flagship model. It is difficult to argue...
Water scarcity and water-quality issues are broadly recognised and understood in most political, business and civil organisations in South Africa, but solving water issues will require wide and continuous action in catchments and municipalities by organisations and...
Work is well under way on the R212-million Imvutshane dam, 30 km north-west of Stanger, in KwaZulu-Natal, which is a key link in supplying people in rural Maphumulo with a reliable source of safe drinking water.