Medupi power station project, South Africa

7th June 2013

By: Creamer Media Reporter

  

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Name and Location
Medupi power station project, Lephalale, Limpopo, South Africa.

Client
Eskom.

Project Description
Medupi, which means ‘a rain that soaks parched lands, giving economic relief’, will be a dry-cooled coal-fired, baseload power-generating plant, comprising six 800 MW units, with a 4 800 MW installed capacity – the biggest of its kind with dry cooling in the world. It will be located on a 883 ha site, formerly a farm named Naauw Ontkomen, previously used for game and cattle grazing.

The planned operational life of the station is 50 years.

The power station will use high-tech supercritical boilers, which will operate at higher temperatures and pressures than older boilers, providing greater efficiency.

It is the first baseload coal-fired station to be built in South Africa in more than 20 years and its delivery on schedule is viewed as critical.

The project will form part of the utility's integrated strategic electricity plan.

Value
R91.2-billion, with Eskom having spent R55.2-billion as at March 31, 2012.

Duration
The plant will be ramped up to full capacity by 2017.

Latest Developments

Wade Walker, a wholly owned subsidiary of Murray & Roberts, has embarked on a subcontract at the Medupi project.

The subcontract calls for electrical and instrumentation installation on nine substations and on 54 coal and ash conveyors, varying in size from 100 m to 300 m and extending over an estimated 11.5 km. This work includes cable racking, junction boxes, instrumentation and cabling.

Meanwhile, Eskom, its contractors and the trade unions representing the workers at the Medupi and Kusile power-station project sites were not able to conclude a new labour agreement by the end of May, as had initially been hoped.

However, Eskom spokesperson Hilary Joffe said that significant progress had been made.

The talks, which are being facilitated by mediators, have been convened to renegotiate the troublesome project labour agreements (PLAs) and replace them with new ‘partnership agreements’.

The PLAs have been blamed for labour strife at both sites, with the Medupi project, in Limpopo, having been particularly strike prone – the site was closed for ten weeks earlier this year.

The reworked arrangement is expected to result in a more consistent application of labour contracts across the site and could include productivity-linked incentives to align rewards for workers with their keeping to project schedules.

The seven unions involved in the PLA negotiations are also keen for the standardisation ofpayment rates for general workers and are seeking training commitments from the contractors.

Eskom has indicated that it will take a more “hands on” approach to industrial relations and to the management of the project.

A board subcommittee is monitoring progress across all capital projectsand is reporting biweekly to Public Enterprises Minister Malusi Gigaba. In addition, Eskom senior executives are spending at least a day a week on the Medupi site.

Key Contracts and Suppliers
Parsons Brinckenhoff (contracts manager); Exxaro Resources (coal agreement); Roshcon (enabling civils); BKS Group (audit and design of concrete steel structures); Murray & Roberts, or M&R (structural steel fabrication and erection, mechanical installation works, boiler construction and civil works contract); Energy Fabrication (supply of 30 000 t of fabrication platework for the boiler ducting and coal bunkers); HPA and Hitachi Power Europe, or HPE (engineering, supply, manufacturing, construction and commissioning of utility steam generators, as well as related components, such as regenerative steam air heaters, coal mills and feeders, sootblowers, fans, de-ashers and high- and low-pressure pipework); Alstom (turbine-generator protection equipment); SPX Corporation (pulse-jet fabric filters and air preheaters, as well as the manufacture of pressure parts); GEA (design, manufacture, supply and erection of the air-cooled condensers); Hansen Transmissions South Africa (condenser gearboxes); Afrimat, in partnership with local suppliers Chobe Crushers (supply of aggregate); BroKrew Industrial (fabrication, corrosion protection and delivery of ducting for six air-cooled condenser sections); Genrec Engineering (awarded several projects by M&R, which is contracted to HPA (connection design, as well as detail, fabricate and supply structural steel for the boiler island, auxiliary bay structures, ash transverse conveyors, coal incline conveyors, and the primary and secondary coal conveyors); SSI (engineering services); Cosira (turbine hall); Kwikspace (modular accommodation units); Sarens (mobile crane hire); Voith Turbo (Vorecon drives); Concrete Finishing Equipment (dust filters and silo and environmental safety); Areva's transmission and distribution (T&D) division (switchgear cubicles); Mikropul (axial-flow fans and auxiliary equipment for the turbine halls' ventilation); General Electric, or GE (low-voltage switchgear system); Siemens (generator transformers); Clyde Bergemann Power Group, subcontracted by HPA (supplier of sootblowers for boilers); Clyde Bergemann Africa (fly-ash handling and conditioning systems); DSE Structural Engineers & Contractors, subcontracted by Genrec Engineering (air preheater structure); Steel Services Direct, or SSD (steel, pipes and wax plants); GB Bearings (supplier of HSR horizontal bearing assemblies and profile bore bearings); Sulzer Pumps South Africa, subcontracted by Actom (fabrication of 48 pumps for boiler feed, booster and condensate extraction duties); Steloy Castings, subcontracted by Sulzer Pumps South Africa (supply of chrome steel components for the pumps); ThyssenKrupp Materials Handling, or TKMH (coal stockyard equipment); a.b.e. Construction Chemicals (supply of waterproofing, flooring and sealant products, as well as other general construction products); LP Services consortium (engineering, procurement and construction contract for the low-pressure services); Lighting Structures (design, manufacture, supply and installation of Hi Masts); Basil Read (ash-dump infrastructure); ELB Engineering Services (terrace coal and ash); Actom (electrical power installation, chimney and silos) Aqua Engineering (water treatment);  Konecranes (heavy-duty cranes) and Wade Walker (electrical and instrumentation subcontract).

On Budget and on Time?
It is possible that cost overruns could result from efforts to make up for lost time and Eskom is working on quantifying that risk.

O’Flaherty has stressed that the conditions of the various contracts do allow Eskom to recover costs where it can prove that the cause of the delay rests with a contractor.

Gigaba, however, has not ruled out the possibility that the shareholder might be requested to step into provide support beyond that which has already been extended in the form of loans and guarantees. Such a course of action will be pursued holistically and will not be confined to the support that might be required specifically for Medupi.

The Minister’s comments come against the backdrop of growing speculation that Eskom might turn to its shareholder for additional guarantees, following the National Energy Regulator of South Africa’s decision to grant only half of the 16% a year in tariff increases Eskom had sought for a five-year period from 2013 to 2018.

Currently, the Medupi project is expected to cost R91-billion, with nearly 60% of the project completed. The 4 800 MW power station was expected to reach full commercial operations in 2016, with five more 800 MW units to be added in six-month intervals, following the synchronisation of Unit 6 in December.

Dames says Eskom has received written assurances from HPA and Alstom that they will "deliver on time", but adds that they "still have to prove that to us and to South Africa".

Three work packages are of particular concern:
• The Alstom Control and Instrumentation (C&I) contract to deliver the central computer system needed to monitor and control the plant. The software has failed factory acceptance tests and various remedial actions are currently under way.
• Irregularities have also been found in the postweld heat treatment of the boiler and HPA is testing 9 000 potentially faulty welds out of 53 000 boiler welds.
• Eskom is also concerned about boiler welds that do not meet Welding Procedure Qualification Record specifications.

HPA has finalised a solution to the welding issues, which is already being implemented and it will not delay the start of power generation from Unit 6.

HPA is deploying specialised resources and equipment from Europe to complete this work within the agreed timescales.

Meanwhile, Alstom’s Cochet insists that the French group is part of the solution to Medupi and “not part of the problem”, noting that the C&I contract is only part of the total work to be delivered by the group, which is also supplying the turbines.

The boiler C&I system “will perform to specification and will not delay Alstom’s delivery schedule”, he insists.

Nevertheless, Gigaba has warned that failure to meet the December target for first synchronisation will result in “tough penalties being imposed on any party responsible for such delay”.

Contact Details for Project Information
a.b.e. Construction Chemicals, Elrene Smuts, tel +27 11 306 9000.
Actom, Mark Dixon, tel +27 11 820 5111, fax +27 11 820 5100 or email mark.dixon@actom.co.za.
Afrimat investor and corporate relations, tel +27 11 325 5944 or fax +27 11 325 5942.
Areva T&D, Mark Dixon, tel +27 11 820 5037; or James Mulholland, tel +33 1 34 96 31 82 or email james.mulholland@areva.td.com.
BKS Group, tel +27 12 421 3500, fax +27 12 421 3501 or email group@bks.co.za.
BroKrew, tel +27 11 668 6300 or fax +27 11 955 1958.
Chobe Crushers, tel +27 14 763 5130.
Clyde Bergemann Africa, tel +2 7 11 704 0580, fax +27 11 704 0597 or email enquiry@cbz.co.za.
Clyde Bergemann Power Group, tel +49 281 815 101, fax +49 281 815 184 or email info@clydebergemannpowergroup.com.
Cosira group senior project manager Jerry Methi, tel +27 11 817 6600, cell +27 86 537 1730 or email jerrymethi@cosiragroup.com.
DSE Structural Engineers & Contractors, tel +27 11 871 4111, fax +27 11 871 4141 or email dse@grinaker-lta.co.za; or MD Kobus Marais, cell +27 82 904 4657 or email kmarais@grinaker-lta.co.za.
Energy Fabrication, tel +27 11 456 1000, fax +27 86 637 1756 or email info@energyfabrication.co.za.
Eskom Enterprise Medupi project senior communications adviser Mashudu Ramulifho, tel +27 14 762 2148, fax +27 86 607 6080, cell +27 82 901 7184 or email Mashudu.Ramulifho@eskom.co.za.
Eskom media desk, tel +27 800 3304/3309/3343/3378, fax +27 11 800 3805 or email mediadesk@eskom.co.za.
Eskom national call centre, tel 0860 037 566.
Exxaro Resources investor relations Adriaan de Beer, tel +27 12 307 4189 or email adriaan.debeer@exxaro.com.
GB Bearings, tel +27 11 974 1291 or fax +27 11 974 1468; or sales and marketing manager Alan Parkinson, email alan.parkinson@gbbearings.co.za.
GEA Aircooled Systems engineering and contract manager Albert Zapke, tel +27 11 861 1521 or email Albert.Zapke@geagroup.com.
GE corporate investor communications, Elizabeth Seibert, tel +1 203 373 2460 or email ir.contacts@corporate.ge.com; or corporate investor communications director JoAnna Morris, tel +1 203 373 2472 or email ir.contacts@corporate.ge.com.
Genrec Engineering, tel +27 11 876 2300, fax +27 11 827 1733 or email sales@genreceng.co.za.
Hansen Transmissions project manager Ludwig Maier, tel +27 11 571 9611, cell +27 82 213 2218 or email lmaier@hansentransmissions.com.
HPA, tel +27 11 260 4300, fax +27 11 656 3609 or email info@hitachi-power.co.za; or media liaison Pamella Radebe, tel +27 11 260 4300 or email pradebe@hitachi-power.co.za.
HPE, tel +49 203 80 38 0 or fax +49 203 80 38 1809.
Kwikspace, tel +27 11 903 8993 or email barney@kwikspace.co.za.
IWC, tel +27 11 466 0699, fax +27 11 466 8180 or email mail@iwc.co.za.
Lesedi Nuclear Services marketing manager Shane Pereira, tel +27 21 525 1300, fax +27 21 525 1333 or email shane.pereira@lesedins.co.za.
Mikropul, tel +27 478 0456, fax +27 478 0371 or email sales@mikropul.co.za.
M&R, tel +27 11 723 2080; or group communications executive Ed Jardim, tel +27 11 456 6200, fax +27 11 455 1322, cell +27 83 357 6282 or email eduard.jardim@murrob.com.
Parsons Brinckenhoff, tel +27 11 787 4141, fax +27 11 886 0359 or email project@pbworld.com.
Roshcon, tel +27 11 629 8000 or fax +27 11 626 3460.
Sarens, tel +27 11 861 3800, fax +27 11 861 3899 or email info@sarenssa.co.za.
SSD, tel +27 11 828 0439 or fax +27 11 828 2810; or director Theo van Schie, email theo@steelservicesdirect.co.za.
SSI CEO Naren Bhojaram, tel +27 11 798 6000, fax +27 11 798 6005 or email corporate@ssi.co.za.
Steloy Castings, tel +27 13 933 3331, fax +27 13 933 3653 or email info@steloy.com.
Sulzer Pumps South Africa, tel +27 11 820 6252 or fax +27 11 820 6205; or Gavin Doran, email gavin.doran@sulzer.com.
TKMH, tel +27 11 236 1000 or fax +27 11 236 1235; or marketing manager Willie Agenbag, email Willie.agenbag@thyssenkrupp.com.
Voith Turbo operations manager Izak van der Walt, tel +27 11 418 4076, fax +27 11 418 4059 or email vanderwalt@voith.com.
Wetback Contracts, tel +27 11 392 8000, fax +27 11 392 5856 or email info@wetback.co.za.
Lighting Structures, Pieter Jooste, tel +27 87 310 1000, fax +27 86 699 6999 or email p.jooste@leblancgroup.com.
Konecranes, tel +27 11 864 2800.
Wade Walker, Tim Wakefield, tel +27 11 466 0377 or email tim@wadewalker.co.za.

Edited by Creamer Media Reporter

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