Kusile Eskom load shedding stage 4

Image via Wikimedia Commons

Revealed: The astronomical cost of Eskom’s poorly-designed Kusile plant

Eskom were swindled out of billions by a US construction firm, who have been allowed to carry out repairs to the troublesome Kusile plant they initially built.

Kusile Eskom load shedding stage 4

Image via Wikimedia Commons

Eskom are not in the public’s good books right now: On Thursday, the failing power suppliers secured a sharp tariff increase to be implemented over the next three years, making consumers pay 22.7% more by 2022. It doesn’t seem like they’ll be endearing themselves to South Africans any time soon, either.

A report in City Press has outlined how an American firm secured the tender to build the Kusile plant in Mpumalanga. If you’ve been following the Eskom crisis closely, you’d have heard this name a lot – Kusile has been described as “poorly designed” and simply not fit for purpose.

How much Eskom paid for Kusile

In an incredibly naive move, the utility effectively told the US company to name their price. A few years later, with a patchwork power plant lumbered onto the people of Mzansi, they returned with an eleven-figure invoice.

They told Eskom to cough up R12 billion for their services, to which they duly obliged. However, Kusile requires several significant upgrades to bring it up to standard. That means the construction outfit will be offered another R1 billion over the next three years to complete the repairs.

The development of Kusile was hit by several delays and a series of missed deadlines. Earlier this week, Shadow Public Enterprises Minister Natasha Mazzone rejected the tariff hike approval, suggesting that the taxpayer cannot be held responsible by these types of failed projects.

“Consumers of electricity should not foot the burden for poor project management and build quality at the Kusile and Medupi power plants, nor for the years of corruption at Eskom, nor for its bloated workforce.”

Natasha Mazzone

The state of play

The horrendous mismanagement at Eskom has somehow resulted in the load shedding merchants securing a R69 billion bailout from the government. However, their cash injection comes with a caveat. There’s now a senior team of inspectors who are set to provide monthly updates on where the money will go.

Deals like this R13 billion howler will hopefully become a thing of the past if Pravin Gordhan and co can crack the whip without fear or favour. The SOE chief reacted immediately when Stage 4 load shedding was implemented in February, holding a six-hour crisis meeting which demanded answers from the utility on what went wrong.