The long, long wait for Medupi

Until you have driven around a 4 764MW power station under construction, like Medupi, you can’t comprehend what a complex undertaking it is. And the thought that just one person is co-ordinating it all is mind-boggling.

Every move is under close public scrutiny because the delay in completing the power station is exacerbating an already constrained national electricity supply.

The Medupi site covers 883 hectares and the highest point of the plant, the chimneys, will reach 220m. To put that in perspective, the boilers are 130m high – as high as Sandton City.

More steel (120 000 tonnes) will be used in it than in the world’s tallest building (the Burj Khalifa in Dubai), and the project will use enough concrete to build four of Cape Town’s Green Point stadiums.

It is an enormous and very impressive engineering and construction feat.

Biggest in the world
Medupi will be the fourth-largest coal power station in the southern hemisphere, and the largest dry-cooled coal power station in the world. Its older neighbour, the 3 990MW Matimba, which you can see from Medupi, was previously the largest.

Although Medupi is impressive, the only question the public want answered is: When will it start supplying elecricity?

It is four years behind schedule, so, in the public consciousness, Medupi is the power station that won’t.

Medupi project director Roman Crookes, seated in a small, functional boardroom in the Medupi main office next to the giant construction project, said this week he was proud of the work being done, despite the delays.

Unit six, the first projected to go on line, was originally planned for synchronisation in 2011.

Crookes said the unit was expected to begin feeding some power into the grid in the next few weeks. But it will take several months of fine-tuning before unit six will be ready to supply “full power”. That is when the commercial operation can begin, which is expected to be in June this year.

All six units, which are planned to generate 794MW each, are projected to be on line by 2019.

No date has been set for the synchronisation of unit five, but Crookes said it could be eight to nine months after unit six.

Despite the delays, project director Roman Crookes is proud of the work being done at Medupi. (Photos: Madelene Cronjé, M&G)

Eskom’s other new plant, Kusile, which is being built in the Nkangala district of Mpumalanga, expects its unit one to be synchronised with the grid in the first half of 2017.

Lying in the shadow of Medupi is the town of Lephalale, whose fortunes are tied directly to the power station – as they were to Matimba, which was built between 1988 and 1993. During construction, business and the town boomed. But once the power station was completed, only a few hundred workers were retained and many companies went under.

Ellisras, as Lephalale was then known, became a ghost town.

Boom town
A power station has once again changed its fortunes and Eskom reports that the town’s gross domestic product is increasing by 95% a year.

But Lephalale has its own electricity crunches, largely owing to the demand that more than 17 000 workers (Medupi’s peak staff count) places on the small town.

The acting municipal manager, Charles Lekaka, said the municipality grew from 84 000 residents before Medupi to 115 000, as measured in the national census in 2011. Construction activities began in May 2007.

Lephalale is a far cry from the town some residents remember, a town that used to have only one stop street.

Now businesses have opened and malls, houses, flats, clinics and roads have been built and the sewerage system and water works upgraded.

There were four hardware stores before Medupi and now there are 14, and the number of schools has increased from four to nine.

But for almost 10 months, new flats, houses and businesses could not get a guaranteed electricity supply, so buildings sat unoccupied.

Eskom contributed towards the installation of a new substation to increase the town’s electricity supply.

The new mall, which opened in September 2013 with 30 retail stories, was delayed because of electricity supply problems. But work is now underway on phase two, with another 40 retail stores, which is due to open in a few months’ time.

According to Wayne Derksen, the president of the local chamber of commerce, 2 500 new houses were built between 2009 and 2010, and more than 1?000 new flats were constructed in the past two years.

Before 2007, there were only a handful of guesthouses and bed-and-breakfasts; now there were more than 3 000.

Property prices
Despite this increase in accommodation in the town, property prices were “through the roof”, he said.

Margie Geyser, from the property company Remax, said demand for accommodation in Lephalale peaked in 2012 and 2013, when there was a zero percent vacancy rate.

But 2014 had seen the demand drop off. She said there was now a 5% vacancy rate and demand was expected to drop off significantly in 2016.

The giant Medupi will be the largest dry-cooled coal power station in the world.

A local supermarket manager, who did not want to be named, said, now that the number of workers at Medupi was shrinking, some shops were closing.

He said his store had seen a 30% increase in turnover during the boom years, but this had begun to dissipate in the past year.

He ascribed it to decreasing staff numbers at Medupi and increased competition from new retailers.

“There used to be five places to buy groceries in town,” he said. “Now there are four more opened in the last two years.”

Limit to prosperity
Abrie van Vuuren, who provides accommodation to Medupi contractors, said a 100% occupancy rate in 2012 and 2013 had dropped to 70% for 2014.

“We have three more years of this and then it’s gone,” he said.

Asked what he would do then, he said it was nothing new for Lephalale.

“We have gone through this before, when Matimba was built.”

Crookes rattled off statistics about how Medupi had affected Lephalale. About R2.6-billion has been spent with suppliers in the town and the Waterberg area and R2.3-billion on infrastructure. As of November last year, there were 14 923 workers on site, and 42.4% of them were from the Lephalale and Waterberg region.

He said Eskom bused in between 10 000 and 12 000 workers, who live within 70km of Medupi. Those from further afield in South Africa – 47.9% – lived in the town.

But he said the reality was that a project like Medupi was finite and once the plant was up and running the operating and maintenance teams would be only 600 to 700 strong.

He added that Eskom did not want Lephalale to become a shell after Medupi was completed.

“There can be no doubt that, when you are building a R105-billion project with over 15 000 employed on the site, it is a massive cash generator in terms of payments into the town and, for that to come to an end, it will have a significant impact if the next projects are not close on its heels.

Railway hub
“What everyone in Lephalale is now waiting for is the presidential infrastructure projects, one of which is to build a railway hub here in Lephalale,” said Crookes.

“Ideally you want to bring that project through not too far after Medupi so you can make use of the skills that have been developed in this region.”

Derksen said “post-Medupi” was at the back of everybody’s minds, but new mines were being developed, which locals hoped would sustain Lephalale’s new prosperity.

Ricardo Jardim and Jose Goncalves own the Pika Liquor Zone in Lephalale. They share other residents’ fears about the future of the town.

Lekaka said there would be an economic dip, but the new coal mines and Transnet’s major upgrade to the railways in the area were on their way.

“It’s business as usual. It will slow down for a year or two and then it will pick up again.”

Future of Lephalale
Ricardo Jardim and Jose Goncalves, who own the large Pika Liquor Zone, said there was a lot of talk among residents and business owners about the future of Lephalale.

“There is a worry,” they said. “But people are saying that Lephalale could be the next Polokwane, the next Rustenburg.”

Another resident was glib about the future. “Medupi is so far behind, we are safe for another 10 years.”

She was not from the town but had seized a contract opportunity there.

“They say you’ll cry twice: the day you arrive in Lephalale and the day you leave Lephalale,” she said. “I won’t cry when I leave here.”

For South Africans elsewhere, the completion of Medupi will mean no more load shedding but, for the people of Lephalale, their relationship with the power plant is a lot more complex.

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Lloyd Gedye
Lloyd Gedye
Lloyd Gedye is a freelance journalist and one of the founders of The Con.

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