The delayed R20bn project aimed at expanding the lifespan of the Koeberg nuclear power station will now start in December at a cost higher than the initial estimate.
This is according to Eskom in a presentation made to parliament’s portfolio committee on public enterprises, mineral resources and energy on Tuesday.
The 38-year-old Western Cape station was scheduled to have been overhauled by November 2018, with its six steam generators replaced.
But the project was hit by delays, including the manufacturing and installation of new generators by Paris-based company Framatome, and the work in Koeberg’s unit 1 will be undertaken later this year.
The second unit is expected to be overhauled by October 2023, Eskom announced, while also partly taking the blame for the delays.
“Eskom and the contractor have contributed to these deficiencies and there are several associate disputes between Eskom and the contractor which are currently subject to adjudication,” stated Eskom.
The power utility said that though the delays did not affect the scope of the overall extension, it would affect the cost of the project.
“The unexpected compensation events and contract price adjustment increases will have an impact on the costs of the specific steam generator replacement allocation which is being finalised,” said Keith Featherstone, Eskom's acting chief nuclear officer.
The compensation events included a R650m cost order granted against Eskom in the Constitutional Court in relation to the contract.
Eskom also stated that forex costs and interest charges were significant because the extended project duration influenced overall costs.
Eskom management has identified poor project management, inadequate contract management and a lack of financial discipline as being contributory factors towards the project not commencing as scheduled.
— Keith Featherstone, Eskom's acting chief nuclear officer.
However, no revised figure was given for the project.
The lifespan and operating licence of the Koeberg station, which produces about 1,940MW of power, comes to an end in July 2024.
Eskom awarded a R20bn tender to Areva NP (now Framatome) in August 2014 to replace and install six steam generators at Koeberg. This was to have been completed by 2018.
Eskom told the portfolio committee that if it had gone ahead with replacing the steam generators in January during unit 2’s refuelling, this would have made load-shedding worse.
Featherstone said they had to halt the project due to “several serious deficiencies in the front-loading of the project which would have caused significant delays to the outage which Eskom and the country could not afford”.
However, despite the replacement of steam generators, the return to service of Koeberg’s unit 2 was still delayed, which contributed to plunging the country into stage 6 load-shedding.
Unit 2 was out from mid-January and its return was two months behind schedule, denying SA 970MW of power during the winter peak power usage season causing stage 6 in June.
The embattled power utility had to twice implement stage 6 load-shedding in as many weeks in June, on one occasion passing the blame to an illegal industrial action by members of the National Union of Mineworkers (Num) and the National Union of Metalworkers of SA (Numsa).
Featherstone told parliament if they had installed the new steam generators, unit 2 would have been out for much longer.
“Eskom management has identified poor project management, inadequate contract management and a lack of financial discipline as being contributory factors towards the project not commencing as scheduled,” Featherstone said.
The Eskom’s team was led by under-fire CEO Andre de Ruyter and board chairperson professor Malegapuru Makgoba.
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