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Released January 31, 2014 | JOHANNESBURG
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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Following a series of missed project deadlines and failed system tests, South Africa's state-owned power utility, Eskom (Johannesburg, South Africa), has exercised its contractual rights by appointing Siemens AG (NYSE:SI) (Munich, Germany) to replace Alstom (OTC:AOMFF) (Paris, France) as the supplier of the boiler protection system (BPS) at the $10 billion, 4,800-megawatt (MW) Medupi mega-thermal power station in the northern province of Limpopo.
Alstom says that the BPS was only a small part of its total contract with Eskom, and it still is responsible for the rest of the overall control and instrumentation package.
Alstom said that other systems, apart from the BPS, were performing to specification. The company said that the installation of turbines and generators represented the vast bulk of its work on the project.
Brian Dames, Eskom's departing chief executive officer, said that contractors had put in claims, but that Eskom would put in "massive" claims against contractors, with legal issues set to continue beyond the commissioning of the Medupi and the similar Kusile mega-project. Eskom maintains that delays related to the boiler (Hitachi) and control and instrumentation system must be contractor issues.
Without commenting on a possible challenge to the termination of its BPS contract, Alstom said that the system being supplied for Medupi had been tried and tested and was in operation at other plants in Europe. The Eskom BPI system has twice failed operational tests. Alstom is responsible for other elements of the control and instrumentation, including the balance-of-plant operations.
Dames said that Eskom would soon decide whether it would implement a Medupi-type BPS solution at the Kusile project in the Mpumalanga province. Hybrid-control solutions were in place at many other Eskom sites. It is critical that the interface requirements are met by the supplier.
Alstom has been a central contractor for Eskom's power-station projects for decades, and Siemens has had an established presence in the country for well over a century. But in a volatile election year, politicians want to appear to be making the right decisions and maintaining strong control, and the government has been making promises on when the Medici project would send its first power to the grid. The book is open on whether Medupi will generate power by the end of the year. With their necks on the line, Eskom and the government are saying that their money is achieving results.
For related information, see December 11, 2013, article - Eskom Cancels Alstom's Systems Contract at Medupi Mega-Thermal Project, and November 13, 2013, article - Eskom Fines Hitachi, Alstom for Medupi Project Delays.
View Project Report - 85000283 85000293
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
Alstom says that the BPS was only a small part of its total contract with Eskom, and it still is responsible for the rest of the overall control and instrumentation package.
Alstom said that other systems, apart from the BPS, were performing to specification. The company said that the installation of turbines and generators represented the vast bulk of its work on the project.
Brian Dames, Eskom's departing chief executive officer, said that contractors had put in claims, but that Eskom would put in "massive" claims against contractors, with legal issues set to continue beyond the commissioning of the Medupi and the similar Kusile mega-project. Eskom maintains that delays related to the boiler (Hitachi) and control and instrumentation system must be contractor issues.
Without commenting on a possible challenge to the termination of its BPS contract, Alstom said that the system being supplied for Medupi had been tried and tested and was in operation at other plants in Europe. The Eskom BPI system has twice failed operational tests. Alstom is responsible for other elements of the control and instrumentation, including the balance-of-plant operations.
Dames said that Eskom would soon decide whether it would implement a Medupi-type BPS solution at the Kusile project in the Mpumalanga province. Hybrid-control solutions were in place at many other Eskom sites. It is critical that the interface requirements are met by the supplier.
Alstom has been a central contractor for Eskom's power-station projects for decades, and Siemens has had an established presence in the country for well over a century. But in a volatile election year, politicians want to appear to be making the right decisions and maintaining strong control, and the government has been making promises on when the Medici project would send its first power to the grid. The book is open on whether Medupi will generate power by the end of the year. With their necks on the line, Eskom and the government are saying that their money is achieving results.
For related information, see December 11, 2013, article - Eskom Cancels Alstom's Systems Contract at Medupi Mega-Thermal Project, and November 13, 2013, article - Eskom Fines Hitachi, Alstom for Medupi Project Delays.
View Project Report - 85000283 85000293
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
