Eskom Media Release

No Nuclear until Medupi et al properly commissioned

Eskom_07A“OUTA urges Eskom to provide a commitment that no decision or movement on the Nuclear Energy matter will take place until the mega power stations at Medupi, Kusile & Ingula have been commercially commissioned,” – Ted Blom, OUTA’s spokesman on Energy matters.

It is our opinion that Eskom has been withholding crucial facts, which if illuminated to the public, clearly illustrates why it cannot be entrusted with not only the nuclear decision, but the responsibility of managing the construction program as well.

Some of the facts which Eskom have not been open and forthcoming with include:

  1. The gross over-expenditure and delays at Medupi, which now has an expected cost by completion in excess of R200bn. Given that an “off the shelf “solution could have been acquired by Eskom for under R35bn and the entire plant built within 48 months – as was accomplished by Tata Energy at Mundra Powerstation at the same time as Eskom’s new power projects got under way – the public has every right to be extremely angry with Eskom at how this debacle has played out over the past four years.
  2. Oversight of the critical shortage of water for the Medupi plant has resulted in a need to commission a water pumping and storage facility that will probably not be available until 2024. Without the additional water, which will have to come from Lesotho, the Medupi power plant cannot operate as intended and designed, no matter what spin Eskom proffers.
  3. Gross over-expenditure, delays and irresponsible contracting at Kusile, where the coal supply agreements have yet to be signed, despite several years of negotiation. In addition, construction has been slowed down to a snail’s pace as Eskom failed to budget and raise capital in accordance with acceptable worldwide practice for this project.
  4. In addition to the gross over-expenditure, delays and incompetent commissioning of Unit 3 at Ingula Power station, this unit suffered a severe malfunction on its first day of operation. Some two months since then, Eskom has yet to inform the public of this disaster, which was the result of incorrect procedures being followed at Unit 3 at Ingula. Such basic incompetence is extremely costly to society and an embarrassment to the world.
  5. Eskom directors have recently “only paid themselves an R18m bonus”, while the performance pact between Eskom and its shareholders clearly stated that if there were transgressions bigger than R10m in any financial year, bonuses would be forfeited. The above disasters plus the BIE labour fraud of over R10 million should have seen the executive bonuses cancelled, plus clawbacks from previous years instituted. There is no excuse or logical reason why Eskom executives should receive these huge bonuses.

OUTA believe it is time that Eskom became more transparent and positively engaged with society over the many issues which speak volumes about this State Owned Entity’s many inefficiencies and lack of good governance and leadership. Until then, Eskom will never gain the confidence of the people on their actions or decision on the Nuclear Energy saga.

“We remain unconvinced over the Nuclear Energy plan. It will devastate the small and shrinking South African economy if we were encumbered with an estimated debt of one trillion rand, whilst this State Owned Entity continued to shower the nation with increasing energy costs along with incomplete and grossly over-run energy projects,” says Blom.

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