Eskom appoints ABB for C&I contract for Kusile - CNBC Africa

Eskom appoints ABB for C&I contract for Kusile

Southern Africa

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Eskom has appointed ABB South Africa to execute the C&I contract for Kusile. PHOTO: Wikipedia

Eskom has appointed ABB South Africa to execute the control and instrumentation (C&I) contract for Kusile.

The power utility announced earlier in the day that it and Alstom S&E Africa had terminated the C&I works contract for the power station, effective as of 17 April 2015.

Eskom indicated that ABB had been selected from two suppliers which were evaluated as part of a procurement process executed in parallel with the negotiation and subsequent consensual termination of the C&I contract.

The procurement process included an early design process and was focused on ensuring schedule security and the seamless introduction of an alternative contractor for Kusile.

“Eskom is looking forward to working with ABB in the execution of the control and instrumentation works, which is the brain of a power plant, at one of South Africa’s important projects, Kusile,” said acting group executive for group capital, Abram Masango.

“We believe that the procurement process that we followed will ensure a seamless transition and that it formed a strong basis for a competent supplier to deliver a quality product within agreed timelines.”

(READ MORES&P lowers Eskom’s ratings, cites negative outlook)

The news comes a day after the power utility had its long-term local and foreign currency ratings lowered to 'BB+' from 'BBB-' by ratings agency, Standard & Poor’s (S&P).

SACCI CONCERNED OVER S&P DOWNGRADE

The South African Chamber of Commerce and Industry (SACCI) has said that it is concerned over the downgrading of Eskom by the agency.

“Moody’s currently has Eskom on a negative rating as does Fitch. Despite National Treasury’s promised injection of 20 billion rand to assist it, Eskom still faces considerable challenges,” it said.

“The potential for the enterprise to raise the additional 50 billion rand that it requires in addition to the original plan to raise 200 billion rand in terms of the Third Multi Year Price Determination (MYPD), at a reasonable interest rate, is significantly reduced by this downgrade.”

(READ MORE: Eskom pulls the plug on CEO & top brass)

SACCI also said it hopes that the recently announced investigation into the high costs of primary energy and cash flow challenges, among others, will be completed with due diligence and within the time frame indicated.

“This has the potential to assist in alleviating the many concerns that have been voiced at this decision,” it said.

“SACCI sincerely hopes that the recent S&P junk status will be of a limited duration.”

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