Report findings show Eskom overpaid contractors R4bn for construction of Kusile

Eskom's Kusile project under construction

STEFANUTTI Stocks and ABB, a Swedish-Swiss multinational, figure highly in the contractors Eskom is found to have overpaid for the construction of Kusile, a 4,800MW coal-fired power station.

BusinessLive, an online publication, cited a report produced by Eskom into the overpayments. The report, presented to Parliament this week, found that overpayments to contractors totalled R4bn. Of this, R1bn each was ascribed to Stefanutti Stocks Basil Read, ABB SA, and Tubular Construction Projects, a South African firm.

Another R735m was attributed to Tenova Mining and Minerals SA, the local arm of the global metals and mining firm, and R180m was overpaid to “various site service contracts”, said BusinessLive.

Kusile has run over budget by more than 100% and contains a number of technical faults which has delayed its construction. Medupi, another similar-sized coal-fired power station, has also reported design and construction faults.

The Eskom report was annexed to a letter which minister of public enterprises Pravin Gordhan submitted to the ANC chief whip on Monday to clear up an “ongoing misunderstanding” that the overpayments originally raised in parliament amounted to R5bn and related to the notorious Gupta family’s Optimum coal mine, said BusinessLive.

This is a separate matter wherein Eskom submitted a claim of R5.5bn against Optimum for undelivered and poor-quality coal, but an arbitration hearing has determined the claim to be R1.27bn, the publication said.

1 COMMENT

  1. This is Eskom’s own report – Stefstocks disputes its findings. Being R80bn overspent at Kusile hardly suggests Eskom have a handle on the rands and cents and their competence in these matters is hardly to be accepted at face value, surely? Also these huge capital projects almost always result in plenty of claims and counter-claims generally settled by a adjudicator. Bet Eskom settles for less than one tenth of this amount, or actually lands up paying in even more…

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