Eskom stalls R19bn power station sale
Mothballed plant could generate 1 500MW, create jobs
October 7, 2009
By SLINDILE KHANYILE
Eskom has been blamed for jeopardising a $2.5 billion (R18.5bn) project that could create thousands of jobs and reopen a power station that could add as much as 1 500 megawatts to the national grid.
The Ngagane power station at Amajuba Municipality in KwaZulu-Natal, shut down 18 years ago, was put up for sale by Eskom last July, but the utility has not followed through with the sale. The Southern Africa Power Consortium (SAPC) was shortlisted as one of the two preferred bidders to kill the old power unit and build a new one. The other shortlisted bidder is the EB Steam consortium.
SAPC comprises Jungin Construction & Engineering (Jice), Korean Western Power, Hanwha Engineering & Construction, Korea Development Bank, Samil PwC, Power Line Electrical, Numsa Investments, Ngomsa Sonqoba and Sizanomama.
Mlamuli Buthelezi, the consortium leader of SAPC, said the last communication it had with Eskom was in last December, when it requested data on the power purchase agreement and financials of the consortium members, which had to be submitted by February.
It had received no correspondence from the utility this year, said Buthelezi. All the electricity would be sold back to Eskom, which could not immediately comment.
"They (Eskom) were supposed to announce the final preferred bidder in March or April but we were told they had to wait for the new government. This is a key matter because we are dealing with foreign investors and for an entity that is trying to raise funds, this matter is not treated with the urgency it deserves," he said.
Buthelezi said the consortium wrote to the Department of Energy in July as it was the custodian of power purchase deals, but had not received a reply. Department spokesman Bheki Khumalo could not confirm or deny that the consortium had contacted the department.
Jice director Paolo Lee said: "I do not understand Eskom's internal decision procedure, which is delayed until now, but from the beginning they asked us to submit the proposal to buy the old station facilities and build a new one. Based on that announcement we submitted the proposal tender, which will invest $2.5bn from foreign funders," said Lee.
"I cannot guarantee we will wait endlessly due to the foreign funders' financial schedule."
In a presentation to Eskom, SAPC said the new power station would create 100 000 jobs during the construction phase and 400 to 500 permanent jobs once the plant was operating again. The station currently can produce 500MW.
EB Steam, the second preferred bidder, could not be reached for comment.
Malcolm Pryde, the chief executive of consultancy firm Future Coal, said reopening Ngagane power station made sense because the infrastructure was already available and there were at least 15 mines that could be reopened to supply the 600 000 tons of coal that would be needed every month.
"There is 400 million tons of coal within a 25km radius of the power station," said Pryde.
The firms that Pryde represents will supply 200 000 of the 600 000 tons of coal a month. The R18.5bn offer would buy the existing facility, secure the land, clean the site, pay for civil construction, and build the boilers, thermal turbines and other power station facilities.
Lee said the station would be 70 percent financed through debt from global institutions and 30 percent would be capitalised by shareholders.
Yesterday Bloomberg said Eskom had a power reserve margin of just above 10 percent, less than its minimum target of 15 percent, according to chief executive Jacob Maroga.
|
|
