Johannesburg - A total of eight months in construction time has been lost on the Medupi power station project, most of it in the past 12 months, because of labour unrest and disruptions.
Andrew Etzinger, a spokesman for Eskom, confirmed this on Friday but indicated that the labour environment at the project had steadily improved since July following the signing of a partnership agreement.
Etzinger was responding to questions by Business Report after Mark Marais, the fleet director for the Medupi and Kusile power stations for primary contractor Hitachi Power Africa, had said almost five months in construction time had been lost on the Medupi project this year because of strikes and labour problems.
“We have not worked for five months other than our expatriate labour. It’s had a major impact on the construction, not only for Hitachi, but for all contractors,” he said during a break in a seminar last week hosted by the Department of Science and Technology and Hitachi on the global lessons from Japan’s Hitachi in implementing large-scale infrastructure projects.
Etzinger said issues that needed to be resolved with workers on the Medupi project had related largely to travelling and commuting allowances.
He said the partnership agreement, which replaced the project labour agreement, set the framework for how labour matters would be addressed.
Etzinger said there were 17 000 workers on the construction site and inconsistencies between the conditions of service of labour employed by the various contractors had caused friction.
This specifically related to workers who were seemingly doing the same job but were being paid differently by different contractors. They were now aiming as far as possible to align the benefits and conditions of service of workers on the project, he said.
Etzinger admitted labour disruptions had put pressure on time scale of the project, resulting in a delay in its completion.
The completion date for the project has been moved to the second half of next year.
Sapa reported that the Supreme Court of Appeal had ruled on Thursday that Eskom was entitled to the guarantees held by a bank for Hitachi Power Africa related to a Medupi contract.
The court upheld an appeal by Eskom against an order in the South Gauteng High Court refusing to allow Eskom to demand payment of certain guarantees.
The matter relates to Mizuho Corporate Bank of Japan, which issued guarantees in favour of Eskom to secure performance by Hitachi Power Africa under a construction contract at the Medupi project.
In terms of the contract, Hitachi provided six guarantees, drawn on the bank. Three of these guarantees, amounting to R600 million, were the focus of the case.
Eskom alleged that Hitachi had been guilty of ongoing breaches of the construction contract and it had failed to timeously perform its obligations and, in view of these breaches, Eskom was entitled to demand payment under the guarantees.
Eskom was poised to do so to penalise Hitachi for faulty welding and for failure by a sub-contractor hired by the company to heat-treat welds to ensure they could withstand operational stress.
Marais acknowledged on Thursday that Hitachi had welding problems at Medupi but stressed “the positive thing is that we dealt with it and are busy rectifying it. We know what the solution is and have agreed a solution with Eskom. Our welding problems will not impact on the final completion of the power station.” - Business Report