Eskom’s current crisis has been blamed on corruption and state capture causing delays and cost overruns at the Medupi and Kusile power plants. The third and fourth largest coal power plants in the world respectively, the plants were originally due to come online from 2012. However, large portions are still under construction and those units that are operating have been plagued by problems, which will cost around R8-million to fix, according to reports.

Corruption state capture reasons for Eskom crisisThe original costs of the two power stations were around R70-billion for Medupi and R80-billion for Kusile, but the costs have escalated by R300-billion, according to the Department of Public Enterprise’s acting Director General, Thuto Shomang.

Shomang told Parliament that Eskom is struggling to maintain operational sustainability due to an ageing generation fleet (about 37 years on average), essential mid-life refurbishments not implemented, and poor quality of maintenance due to poor workmanship. 40% of plant breakdowns were due to human error, he said.

He also said that on its current trajectory Eskom will “cease to exist” by April and is technically insolvent. The cash generated at the utility was not covering operating and debt servicing costs, the headcount had increased from 32 000 to 48 000 between 2007 and 2018, with the associated costs growing from R9.5-billion to R25.9-billion, while municipal debt was growing at around R1-billion a month, he told Parliament.

While he only touched on the costs associated with Medupi and Kusile, Eskom chair Jabu Mabuza has told the media that the power stations are producing half the electricity they should be, and that the list of defects has resulted in frequent tripping and maintenance requirements twice as frequent as at other plants. The boiler design results in high temperatures the spray water system cannot adequately cool. The design also causes ash blockages and does not allow for proper dust control, while the computer control system does not meet technical specifications, he said.

Eskom blames these faults on its main contractor, Mitsubishi Hitachi Power Systems Africa, the same company that has been found responsible for defective welding and for being repeatedly unable to pass a key milestone before commissioning, namely the steam quality test. Mitsubishi Hitachi Power Systems Africa reportedly has a strong ANC link, with a probe called into the contracted awarded to the company in 2007 when the construction of the power stations was announced. However, no investigation was concluded at the time.

Image credit: http://www.dpe.gov.za/about/Pages/Director-General.aspx


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