Thu. Nov 21st, 2019

Eskom shocked by new R36 billion bill from infamous Kusile unit

Eskom load shedding stage 5 and stage 6Well, isn’t this the last thing that Eskom and the South African taxpayer needed? This latest construction bill from Kusile is eye-watering for the utility.

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With Eskom set to receive a R70 billion government bailout over the next few years, they could lose more than half of that amount before they even get going. Another set of spiralling costs have floored the utility, who have been billed R36 billion by contractors working on the Kusile Power Plant.

The report – which was first published by City Press on Sunday – features a response from Eskom: They’ve confirmed that they received the whopping figure, but stressed that this won’t necessarily be the amount they have to cough up. According to the company, “it provided for a smaller amount in its total R161-billion Kusile budget.”

Why have Eskom been billed R36 billion from Kusile?

The bill itself consists of “unforeseen costs” that weren’t originally mapped out in the contractor’s plans. Kusile has been a nightmare for the entire Eskom grid, despite it being one of the most modern units in operation.

The build has been blighted by shoddy engineering and the ripple effects of corruption: Money meant to get the plant up and running smoothly ended up in the back pockets of crooks, rather than the bank accounts of construction teams.

“Banking” on Kusile to perform, older plants have gone offline and struggled fiercely at the beginning of this year. South Africa went through its worst-ever period of load shedding in March, where it was suspected that Eskom tried to sneak Stage 5 power cuts onto the roster.

Kusile and Medupi: Two underperforming peas in a pod

Kusile also has an ill-behaved twin to speak of, too. The Medupi Plant has suffered the exact same fate, and as a new build, progress has been limited due to the piss-poor management that has been rampant at the power giants.

When both of these “modern designs” are firing on all cylinders, they can add 9 600MW to Mzansi’s total power supply. But you won’t find these two at full capacity any time soon – an issue that the government is racing to fix, as maintenance takes priority going forward.

According to the report, the R36 billion claim isn’t something out of the ordinary on big jobs like these. But, by all accounts, it’s an expense that Eskom can ill-afford.

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