South African power utility Eskom is facing a mounting repair bill at two new coal-fired power stations that are still under construction, compounding its already dire financial situation.
The construction of the Medupi and Kusile plants are expected to cost more than R292-billion (USD21.4 billion), roughly double initial estimates..
While South African President Cyril Ramaphosa has said a plan to stabilise Eskom will be finalised soon, the utility appears to be making little headway in reining in its unsustainable debt and bringing spiralling costs under control. The new Medupi and Kusile plants are a major contributor and their construction is running years behind schedule.
Fixing additional problems which have arisen during construction of the new plants will cost an estimated R2-billion, the utility says in an emailed response to questions. That’s up from a R1.5-billion bill disclosed by chief executive officer Phakamani Hadebe at a briefing on 16 November.
There have been defects in the plant that grinds the coal, the boilers and the control system running the operations and steps are being taken to get the contractors to pay for as much of the repair work as possible, according to Eskom. The problems at Medupi and Kusile have contributed to an increase in unplanned and planned plant outages and resulted in emissions limits being exceeded.
“It basically comes down to the contractors and the fact that they are inadequately supervised,” says Mike Rossouw, an independent energy adviser.
These issues aren’t set to improve until after March.
Source: Building and Construction News