The Koeberg contract and the letter that has caused Eskom’s latest troubles

Eskom’s celebration of a year without load-shedding was marred this week by accusations that the power utility lied under oath in a court battle over its Koeberg renewal programme and by a seeming indifference to employee wage demands.

The National Union of Mineworkers (NUM), the National Union of Metalworkers of South Africa (Numsa) and Solidarity were locked in a second round of negotiations with Eskom on Thursday after some NUM members downed tools on Monday.

Eskom obtained a high court interdict on Tuesday to prevent its staff, considered essential workers, from embarking on industrial action.

The labour drama continues amid a dramatic development in the ongoing dispute over a R5-billion contract to replace six steam generators at the Koeberg nuclear power station.

Eskom has confirmed the suspension of Koeberg’s general manager, Riedewaan Bakardien, over what it considers to be a leaked internal document. He was placed on cautionary suspension after sending a routine letter, dated July 27, to various Eskom suppliers in respect of Koeberg’s planned maintenance outages up to 2025.

Eskom said it contained “unauthorised facts and assumptions relating to Koeberg’s production plan”.

His letter also contradicts Eskom’s declaration before the Constitutional Court in a battle over the replacement of the generators in the deal awarded to Areva.

The utility has been locked in legal proceedings over the contract between the unsuccessful bidder, Westinghouse Belgium, and Areva, and suffered a devastating blow when the Supreme Court of Appeal in December ruled that it had “unlawfully” awarded the contract to Areva. The appeal court ordered Eskom to reissue the contract but the utility has since approached the Constitutional Court.

One of the disputed facts in the case before the country’s highest court is whether the replacement of Koeberg’s steam generators is essential for continued service and nuclear safety.

The power utility’s group executive for generation, Matshela Koko, said in his founding affidavit in Eskom’s appeal to the court that the “current steam generators are fast approaching the end of their lifespan, and have to be replaced during the X23 outage (scheduled for 2018), to ensure nuclear safety of Koeberg power plant”.

But, according to Bakardien’s letter, a copy of which the Mail & Guardian has seen, the steam generator replacement “has not been assigned to any specific outage”. He had sent the letter to various suppliers, including Westinghouse.

In fact, the scheduled outage, X23, has been shortened from 130 days to 90 days “due to the removal of the steam generator replacement from outage X23”, Bakardien’s letter stated. This has a direct bearing on the ongoing legal battle.

Bakardien’s letter also said the scheduled outage, X24, due to take place in 2019-2020, is for “refuelling only”.

This, Westinghouse contends in cross-appeal documents, means that Koeberg’s general manager believes the new steam generators can be safely installed during later outages planned for 2020, and that 2018 is not “an immutable deadline”.

The content of Bakardien’s letter may strengthen Westinghouse’s bid to convince the Constitutional Court that the deal should be awarded to it instead of Eskom reissuing the contract from scratch.

Four days after Westinghouse submitted Bakardien’s contentious letter to the Constitutional Court, asking it to condone its introduction as “weighty and material” evidence, Bakardien was suspended pending an investigation.

Citing court procedures, Eskom’s spokesperson Khulu Phasiwe declined to comment.

Asked about the ongoing strike threat, Phasiwe said the power utility is “full of hope” that the second round of negotiations before the Commission for Conciliation and Mediation and Arbitration on Thursday will be successful.

“We had pockets of people striking on Monday; however, it looks like most reported for work on Wednesday. The coal delivery to the power stations was not affected and Eskom has initiated contingency plans to ensure continued service delivery.”

The unions are seeking a salary increase of between 11% and 13% and a housing subsidy of about R3 000. Eskom’s latest offer is 7%.

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