South Africa: Eskom Should Conduct a Cost Overrun Review At Kusile and Medupi Power Stations

opinion

Fifteen years down the line, both Medupi and Kusile are still not complete. There are outrageous cost and budget overruns. Both projects have been riddled with massive design and construction defects. And the complete scale of corruption is yet to be established -- but how did we get here?

It was revealed earlier this week that engineering and construction firms ABB South Africa, Stefanutti Stocks, and Basil Read Joint Venture, as well as Tubular Construction Projects, have been named by Eskom as among the contractors that benefited from overpayments totalling R4-billion in the construction of Eskom's giant coal-fired Kusile power station in Mpumalanga.

These overpayments refer to financial claims and variation orders that were paid by Eskom to these contractors for additional work. The question of whether or not these claims and variation orders are justified is at the heart of what the Special Investigating Unit and Eskom are attempting to establish through a series of contract governance investigations.

This scandal reminds us yet again why the performance of construction engineering firms in both the Medupi and Kusile power station projects deserves public scrutiny. It warrants an independent review to help South Africans get a clear picture of why they...

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