S.Africa’s Medupi power project delayed, not rejected: Eskom - CNBC Africa

S.Africa’s Medupi power project delayed, not rejected: Eskom

Southern Africa

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“These are not just commitments, these are contractual obligations and we expect those to be made. Certainly the pressure helps put a lot of pressure for contractors to deliver as we indicated on Monday. A lot of progress has been made at Medupi and we’re talking about three critical issues that now need to be resolved in order for us to bring the first unit on load,” Dames said.

Dame admitted that there were flaws in project management by Eskom as well as the contractors saying it disrupted progress and delayed output from the very beginning.

“Certainly we knew that and we supplemented skills at that time, foreign skills to assist in the management side. It’s an issue not just as far as project management is concerned within Eskom but you need project management capability within the contractors itself. I think that has also been a concern. Lots of lessons for us to learn around project management, lots of skills being build up,” he added.

The CEO said the state-owned power supplier has many projects that were contracted with massive companies both locally and internationally, including French company Alstom, which was blamed for disrupting and delaying take-off of the multi-million dollar project.

The project was scheduled to deliver 800 megawatts by the end of December last year.

As a result, the department's director general and senior Eskom executives have been sent to the unitary semi-presidential republic in Western Europe to meet Alstom executives over government’s displeasure the matter.

“I think the importance of the director general going and some of the Eskom executives is really to get across the message around the importance of what they do, not just for Eskom or the project. This is wider than the project - it’s about the impact it has in terms of the country, our economic growth, the importance of the project and getting that message across,” the CEO said.

“The remedies from our side remain and we have very clear remedies that we can use - we will use and have used. What is also very important is that we need to solve the problem. It doesn’t help everybody fighting, we need to find a solution so that we can move forward.” 

On Monday, Eskom announced that the Medupi project would not be able to deliver its first power in December 2013 as scheduled, which received a huge outcry from government and the general public.

Public Enterprises minister Malusi Gigaba has raised concern over Eskom’s ability to manage the mega project saying the delays are impacting on the country’s economy situation.

Eskom's integrated results for the year ended March 2013 reported a 12.2 per cent increase in revenue to R128 billion rand. The power producer also reported a R5.23 billion rand net profit.