South Africa

Power play: Medupi disaster drags on as winter approaches

By Sipho Hlongwane 25 February 2013

South Africa is busy constructing one of the world’s largest coal power stations in Limpopo. However, the project is hopelessly delayed, and winter, with its rolling blackouts, is coming. The site is currently home to thousands of construction workers who routinely halt things by going on strike. It would be great if there were permanent, on-site mediators who could help iron out issues before workers went on strike. There aren’t any, though. By SIPHO HLONGWANE.

The cause of the 2007-2008 countrywide rolling blackouts has been consistently drawn to a bunch of disastrous policies that the government adopted after the fall of Apartheid. Having realised that the country was largely underserved by Eskom, and hoping that the new spurt of economic growth and foreign investment could mean that the private sector would shoulder some of the electricity burden, it deregulated the industry to allow independent operators to build their own power stations.

Disastrously, the government also prevented Eskom from building power stations or strengthening the transmission network. The private investors balked at the barriers to entry that still existed in the industry despite some deregulation, and no new stations were built. Inevitably, the grid began to feel the strain in the mid-2000s. Therefore Eskom commissioned the construction of two coal-power stations, one in Mpumalanga, called Kusile, and Medupi in Limpopo.

About 17,000 people work at the Medupi site (only about 2,500 are unionised, with the National Union of Metalworkers of South Africa), located near Lephalale. The nearest small city is Polokwane, some 250 kilometres to the east.

The site has been hit by a series of major strikes recently, which has been one of the causes of a series of major delays and upsets that have pushed the Medupi final delivery date back so many times that recalling what the original projections and estimations were is proving difficult.

It is the numbers that make the Medupi labour crisis look very scary. Firstly, billions of dollars were borrowed to build the two power stations. Medupi will house six boilers, each powering an 8800MW turbine, and produce a total of 4,800MW of power. It is expected to become the largest dry-cooled coal-fired power station in the world. The estimated cost (of the entire thing) is R100 billion. This is money that the government has to pay back, and each delay only prolongs the period in which we have debt that isn’t producing electricity. The first boiler, according to the latest projections, is supposed to go onto the grid in the latter part of 2013. There is genuine worry that this deadline will be missed too.

The latest happened in January, when workers aligned with NUMSA downed tools to demand that Eskom replace the existing project labour agreement for the one that existed when construction started. They are also allegedly not being paid double on weekends and say that bonuses are not being paid out fairly or equally.

The unending stream of wildcat strikes got so bad that Eskom announced a three-month plant shutdown. Public enterprises minister Malusi Gigaba intervened personally, and met with representatives of the unions and companies Hitachi Power Africa, Murray & Roberts and Alstom. Last week, the companies issued an ultimatum to all workers who would not show up for work. NUMSA claimed that its workers were locked off the site by management and have promised to fight any move to sack its members who disobeyed the ultimatum.

The strikes looks set to continue on Monday. Numsa Medupi deputy secretary Seanego Ngakamone said: “There is nothing that has been said or suggested to satisfy workers. Maybe tomorrow [Monday] will have something, but Eskom has not come with something that could push us [to stop striking].”

Natasha Michael, the Democratic Alliance shadow public enterprises minister, said that wildcat strikes were partly due to the fact that Eskom and Gigaba did not appoint permanent mediators from the Commission for Conciliation, Mediation and Arbitration at Medupi.

“Medupi is built in the middle of nowhere. It is where thousands of people work. They should have anticipated that there would be labour issues. Many of the problems could be solved by appointing permanent mediators on site. We’re calling on the minister to do this at Kusile and Medupi. They’re like small villages,” Michael said.

The project is more than two years behind schedule, she said. The first phase was due to be finished at the beginning of 2013, according to some Eskom documentation, with the last due in 2017.

“Medupi is so behind schedule that nobody actually knows how far back it is. The goalposts have been shifted that often.”

The crisis is made even worse by South Africa’s continuing electricity shortage. On Wednesday, Eskom announced that the Koeberg nuclear power station in the Western Cape was taken off the grid because of a faulty switchboard. There was also damage to power lines from the Cahora Bassa hydro-electric station in Mozambique, and unplanned outages at some of the older coal-powered stations, according to media reports. This removed more than 900MW off the grid, prompting the public enterprises ministry and Eskom to once again warn the public to cut down on electricity usage.

The companies who have workers at Medupi have been instructed to examine the effect of the work stoppages resulting from labour unrest and to determine what could be done to mitigate them. Gigaba’s meetings have not been successful in stopping the wildcat strikes so far. The problem is that we’re on a ticking clock. It’s not just about making sure that all those borrowed billions are put to actual work, but the fact that when winter comes around, electricity use will shoot up again.

Michaels has a chilling prediction if things stay as they are. She says: “I have no doubt that we will experience rolling blackouts again if we cannot get Medupi onto the grid by the middle of 2013.” DM

Photo: Workers are seen in front the construction site of Eskom’s Medupi power station, a new dry-cooled coal fired power station, in Limpopo province, June 8, 2012. South African power utility Eskom reported a nearly 60 percent rise in full-year profit on Thursday owing to higher tariffs and said it would meet power demand during the winter, despite tight supplies. State-owned Eskom, which supplies 95 percent of South Africa’s power, said profit in the year to end-March rose to 13.2 billion rand($1.58 billion) from 8.4 billion the previous year. Picture taken June 8, 2012. REUTERS/Siphiwe Sibeko


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