Johannesburg - Fix faulty Eskom power stations or build new ones from scratch at huge cost? This is the challenge that the technical audit termed “The Italian Job” has to solve. The Eskom audit, covering the design defects of Medupi and Kusile power stations, is expected to be led by Italian energy giant Enel.
Eskom is reported to have said that the defects, which were partly to blame for load-shedding, will need R8 billion to fix. But energy expert Ted Blom said that the flaws would cost much more, if they were fixable at all.
“Medupi can only achieve 59% of output and Kusile 19.2% of specified output. There are also dozens of other defects in the civil works. If Eskom is going to fix the problems, it might never happen because they don’t have the skills. If it is outsourced, it would cost as much as what the original stations should have cost, around R35bn in 2007 which equals around R70bn today for each station,” said Blom.
He also pointed out that depending on the findings of the technical audit, Eskom will need more than is allocated by National Treasury to fix the defects.
“The finance minister (Tito Mboweni) only allocated R23bn per annum for three years. That is hardly enough to fund Eskom losses projected for the next three financial years. Eskom needs another R200bn to complete the projects and more to actually fix them.”
However, former Eskom boss Matshela Koko accused the power utility of overplaying the defects.
“First, they do not know that in mega projects like those defects are to be expected, but they are frustrated that there is load-shedding and they do not know why so they look for every excuse, they then overplay the defects at Medupi and Kusile They have overplayed the lie of Medupi and Kusile,” said Koko.
So why is Eskom suddenly aware of the defects? Not now, it would seem. According to Koko, they were aware of those defects while he was still at Eskom, and they worked with the suppliers to re-engineer them. “What has to happen is to follow the contract to resolve those defects with the supplier... Normally these defects don’t get resolved overnight.”
Koko highlighted that even older power stations like Matimba and Majuba have defects. “I heard Eskom say it will cost around R8bn to fix the defects. So go fix them with the supplier; remember that the design authority is the supplier. Eskom is not the design authority,” he said, adding that the money to fix the defects should not come from Eskom.
“If it’s a design and construction defect, the person who is designing and building should come to fix it. Money doesn’t have to come from Eskom, contractually, unless you are lying to the public.”
Several attempts to get comment from Eskom were unsuccessful.
Blom said under normal circumstances defects should have been picked up before the handover of the project.
“Eskom has removed the bulk of its experienced engineers and very few appropriately and experienced qualified engineers still work at Eskom, plus corruption and skill shortages run hand in hand. Under normal procedures, defects would be picked up prior to handing over ownership or accepting the project. The perpetrators will have to explain the shortcomings.”
But Koko disputed the skills shortage argument. “Eskom does not have a problem of skills shortages. There are just too many experienced engineers at Eskom. Eskom has a serious skills problem right at the top, the executive and the board. It’s like taking a civilian and making him an army commander,” he said.
This week the National Union of Mineworker of SA called for the total shutdown of Eskom over plans to unbundle the utility into three separate entities. The union said the crisis at the power giant was self-generated and accused government of “deliberately appointing technically incompetent people to run Eskom”.