Eskom’s Medupi and Kusile to cost R36bn to complete, will not be halted — Mabuza

Construction on the Medupi and Kusile power stations will go ahead as the cost of halting the projects will not benefit the economy, the Chairperson of the Eskom board Jabu Mabuza has said.

The power plants are expected to cost R18-billion each.

Mabuza was speaking at a media briefing on the state of South Africa’s power supply on Wednesday along with other Eskom executives and Public Enterprises Minister Pravin Gordhan.

The building of the coal-fired power stations, which started in 2007 and 2008, has been hit by cost overruns, poor engineering designs and allegations of corruption.

Mabuza said questions had been raised on whether it would be feasible to stop construction on the multi-billion rand coal plants now or to continue the process until completion.

READ MORE: Medupi and Kusile: Costly and faulty

“We have done the exercise and have concluded that the costs of not continuing is not going to be met by the benefit of continuing,” said Mabuza.

He said the questions about the viability of stopping the construction at the two mega power plants had been raised by some board members who wanted to know the cost implications if the projects were to be stopped.

“Given that they are at a point where they are almost complete… it would cost around R18-billion each to complete,” he said.

Mabuza said that should they not complete the projects, it was estimated that an additional cost of more or less R8-billion would be incurred in contractual, legal costs and penalties.

“So if you stop this, then you are going to have to build something else.”

He said this could take between 60 and 66 months.

Once hailed as the answer to the country’s electricity supply challenges, the costs for the plants have already escalated to over R300-billion, as revealed this year by the Department of Public Enterprises before a parliamentary Portfolio Committee.

Once completed, Medupi power station was expected to consist of six units, with an installed capacity of 4 764MW. In October 2018, Eskom announced that five of its six units had been synchronised to the national power grid

Unit 1 of Kusile went live in August 2017, according to the power utility. The facility will have six units, each producing 800MW of electricity.

Sunday Times report this year revealed that the Special Investigating Unit (SIU) was investigating alleged theft of R139-billion related to the construction of Medupi and Kusile power stations.

According to the newspaper, the SIU is looking at 11 contractors as part of its investigation into the building of the two facilities. — Fin24

Advertisting

The business of unfinished busines

Physical and psychological violence will continue unless we self-reflect on our apartheid scars

R80-million: The cost of evacuating South Africans from Wuhan in...

The government is expected to evacuate citizens from Wuhan, where the coronavirus outbreak originated

Primedia CEO Essack leaves following internal battles

Omar Essack leaves the 702 and 94.7 owners after a protracted standoff with the board

‘We’re satisfied with SA’s land reform policy’— US Ambassador

Top US official is lobbying multinational firms to invest in South Africa

Press Releases

Tourism can push Africa onto a new path – minister

The continent is fast becoming a dynamic sought-after tourist destination

South Africa’s education system is broken and unequal, and must be fixed without further delay

The Amnesty International report found that the South African government continues to miss its own education upgrading targets

Business travel industry generates billions

Meetings Africa is ready to take advantage of this lucrative opportunity

Conferences connect people to ideas

The World Expo and Meetings Africa are all about stimulating innovation – and income

SAB Zenzele Kabili B-BBEE share scheme

New scheme to be launched following the biggest B-BBEE FMCG payout in South Africa’s history

Digging deep

Automation is unstoppable, but if we're strategic about its implementation, it presents major opportunities

TFSAs are the gymnasts of the retirement savings world

The idea is to get South Africans to save, but it's best to do your research first to find out if a TFSA is really suited to your needs

Achieving the litmus test of social relevance

The HSS Awards honours scholarly works based on their social relevance and contribution to the humanities and social sciences