DA report on Medupi oversight visit 

The DA has learnt that part of the many reasons for the delay in the roll out of the first unit at Medupi power station were allegedly as a result of a sub-contractor connected to the ANC linked, Hitachi Power Africa. The DA has learnt this from both Eskom and Hitachi officials at an investigative oversight visit to Eskom's Medupi Power Station in Limpopo this week.

The three main reasons for delays cited by officials at the site were:

• A Hitachi Power Africa sub-contractor;
• Alstom, responsible for supplying a computer operating system on the site; and
• Labour unrest

Hitachi Power Africa:

Members of Parliament (MPs) on the visit were informed that a Hitachi Power Africa sub-contractor was responsible for the faulty welding on the boilers. 

Hitachi Power Africa officials confirmed that the sub-contractor had misled Eskom and Hitachi into believing that quality control tests on the boilers had been conducted. This was not done. As a result, all the welds on the boiler in unit six had to be re-checked and many replaced.

According to Hitachi Power Africa officials, criminal charges have already been initiated against the sub-contractors. While this is a welcome step in rectifying the damages, it remains a concern that officials refused to reveal the name of the sub-contractor. South Africans deserve to know which entity is responsible for faulty service delivery and misleading both Eskom and the country as a whole. 

The DA will submit parliamentary questions to the Minister of Public Enterprises, Malusi Gigaba, to determine the name of the sub-contractor.

Alstom:

Dan Marokane, Eskom's Acting Group Executive for Capital Projects, confirmed that Alstom has been held responsible for its contribution to the delay in the form of financial punitive measures, but Hitachi Power Africa has not faced the same fate. This must be investigated further.

The work of French Alstom has proved to be a major setback in the rollout of the programme. Alstom is responsible for the Control and Instrumentation system at the plant. Many of the other contractors have now completed their work and await this system to become operational.

MPs were however informed that Eskom has called in their bond with Alstom -effectively instituting financial punitive measures against the company for delays. This system is the "brain" behind the whole station's operation. Without it, the station cannot function.

Labour Unrest:

A major problem at Medupi is the continual labour unrest on the site. The committee met with organised labour and was informed that despite various mechanisms and agreements put in place, the implementation and communication between Eskom, contractors and organised labour remain problematic.

This was evidenced by yet another instance of violent unrest on site, on the morning of 24 July 2013. Neither organised labour, nor Eskom and its contractors knew about the unrest - a sign of the poor communication lines that currently exist. 

The outbreak was violent and resulted in the site being evacuated for the day. We cannot afford that labour unrest to remain a regular occurrence.

MPs were pleased to learn that a partnership agreement had been signed by Eskom, contractors and organised labour which mainly constituted dispute resolution, skills development and wage standardisation. However, for this agreement to work, complete buy-in is required from all parties and regular communication must be vastly improved.

The Way Forward:

While the challenges at the site appeared to be a mammoth task, the DA would like to commend the many committed, highly trained, proud South Africans who work tirelessly each day and through many nights to ensure that this project is completed. South Africa is truly indebted to these individuals for their sacrifice in securing our country's energy supply. 

In order to ensure that all parties are held responsible for all agreements entered into and thereby allow for the delivery of the project by mid - 2014, it is important for Minister Gigaba to receive a full briefing from the committee. I will request committee chairperson Holmes Maluleka to call on Minister Gigaba to appear before the committee in order to receive the report on the visit and listen to the concerns of MPs in order to chart a way forward. 

South Africa depends on the completion of the project. Commitment from all stakeholders will ensure that this happens.

Statement issued by Natasha Michael, DA Shadow Minister of Public Enterprises, July 26 2013

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