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In 2004, whilst working at a power station in the Western Cape, I read – every day – the internal power generation report and realised that if additional capacity wasn’t added soon then the operating margin would vanish, electricity usage bound to increase as the economy expanded. This didn’t take rocket science for the figures were there, available and indisputable.
At that time all the talk was about Pebble Bed Modulator Reactors – PBMR - with millions being poured into the R&D, Eskom planning to build new stations with this technology. Regular maintenance of existing stations continued, everybody assuming that the money, and time, being spent would solve the problem down the line.
The last power stations commissioned were Majuba, I think in about ’96, Koeberg shortly thereafter. Stations generally have a 30-40 year lifespan, this totally dependent on regular – at least yearly - maintenance, and vetting by the regulator. Some last for less time, due to component failure, faults, ageing and so forth and some last longer. Just like cars, houses, anything we build.
In 2010 PBMR was dropped, quietly, when funding was stopped by government. I wouldn’t even want to know what the cost was but trust me, it was huge.
Today, after almost 20 years in operation ALL stations are reaching the end of their lives and due to a variety of factors Kusile and Medupi are way behind schedule, Eskom are bust and we are literally in the dark as to how it happened.
It must be remembered that Medupi and Kusile will only top up a collapsing grid, not add nearly enough for future needs, so more need to be built, should already be in their construction phase actually.
Eskom was indeed once a ‘glorious’ company, today it’s a shambles – thanks solely due to government interference.
By 2004 virtually the entire middle management structure in Eskom – engineers, techs and maintenance staff – had been forced out to turn Eskom into a shining light of AA/BEE compliance. That many of these were then reemployed as contractors and nothing changed, except the cost escalation to pay for this, is just an example of government management, or lack thereof.
The contractors’ brief in general was to train, teach and educate the new crop of employees whilst keeping the system going with the understanding that very little constructive work would happen henceforth. For this they were well paid and everybody was happy, happy.
For government it worked as they could then advertise an enterprise that was clearly BEE and which supplied a service to the population, at a relatively cheap price. An uneconomic price unfortunately but another problem ignored.
The government, and obviously Eskom, then dithered through the PBMR years and concentrated on getting as much money from consumers as possible – by virtually giving electricity away to all and sundry, including non-paying customers like Zimbabwe. This worked so well that they gave the compliant board at Eskom bonuses, and cars, and houses, and free airtime and pretty offices. They were able to do this of course because they weren’t building stations and thus were saving billions, which they gave to government in the form of dividends. Whoopee!
Today all the stations are aged – some being 30+ years old - and we have a problem, blamed variously on Jan Van Riebeeck, the whiteys, colonialism, the English and contractors dropping bolts into turbines. Spot the obvious problems yet?
Today nobody in South Africa has ever built a power station before. Fact!
Those who built the last one are retired, dead or living on the French Riviera off their retirement funds. Some, the canny ones, are consulting at Kusile and Medupi because skills aren’t available.
Kusile and Medupi have taken a lifetime to build, exceeding by far original plans, and budgets, precisely because it’s been a massive learning curve and labour problems, inexperience and ineptitude have merely exacerbated the problem.
The fact that Eskom can’t make a profit because historically they’ve been forced to supply at an uneconomic price seems immaterial to all in government just as long as people aren’t burning things down, or rioting, because they have no service.
Therein lies the rub with Eskom, SAA, the Post Office and government departments in general all being in the same boat due to cadre deployment, a lack of planning, mismanagement, shills shortages, greed - all the ills indeed that today are turning us into a pressure cooker liable to explode at any time.
These enterprises can’t be sold as they’re uneconomical, thus no investor would be interested, they’re top-heavy with ANC cadres and they are inefficient, extremely so.
Well, AA/BEE worked, a lot of people made enormous sums of money, demand finally exceeded supply, productivity went through the floor - staff knowing that their salaries were guaranteed, as with their perks, regardless of what they did - Eskom went bust, as did SAA and the Post Office. Strike three and we’re out!
