How Eskom botched the Medupi and Kusile plan

Eskom's Kusile coal-fired power station in Mpumalanga, December 18 2018. Picture: WALDO SWIEGERS/BLOOMBERG

Instead of resolving the energy shortfall in SA, the plants have been textbook studies on how not to execute large infrastructure projects. Medupi’s completion date has been pushed out until 2020 or 2021 and Kusile, as Bravo is now called, is scheduled for 2023. The delays have given SA months of rolling blackouts, an economy in deep trouble and a huge headache for President Cyril Ramaphosa.

The utility now concedes multiple failings that led to cost overruns and delays, including inadequate planning and front-end engineering development, plus ineffective contracting strategy, execution and oversight. Contractors also performed poorly and incurred limited penalties, while strikes and demonstrations compounded the implementation woes. Turnover at the top — the company has had 11 permanent and acting CEOs since construction began — didn’t help.

“The SA market at the time was not ready for a single contractor to handle the onerous risk of executing a project of this complexity and magnitude,” Eskom said in an e-mailed reply to questions. The company also wanted to develop skills and create jobs by bringing in small and medium-sized contractors, it said.

Eskom said it has paid out R14.8bn to settle the claims, which totalled R252.9bn, and it filed claims of its own worth R2.6bn against companies that failed to meet their contracts.

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