Paul O’Flaherty,
Finance Director,
Eskom
 
15 September 2010 – The Medupi power station has not been delayed by two years, and media reports suggesting this are not true, electricity parastatal Eskom said on Tuesday.

This followed earlier reports that Thomas Garner, manager for growth and energy at Exxaro, had said at a co-generation conference in Johannesburg that the Medupi power station would be behind by two years and that South Africa would shortly be in a dire situation.

"Eskom is concerned by comments that have purportedly been made by third parties outside of the electricity company on its capital expansion programme."

It said it had previously mentioned that there was a potential three-month delay on Medupi for the commissioning of the first unit to September 2012, with additional units coming on stream individually every six to eight months thereafter.

"Various scenarios, including stopping the building of Kusile or delaying Medupi for two years, have been run for the department of energy’s Integrated Resources Plan 2 modelling but they are no more than scenarios," Eskom finance director Paul O’Flaherty said.

In particular, Eskom had submitted a proposed funding model for Kusile to the government.

"A decision on it is imminent following which Eskom will be in a better position to comment on how Kusile will be funded."

O’Flaherty said the government and Eskom were 100 percent committed to building Kusile.

"Costs for Medupi are R125-billion and for the second power station Kusile R140-billion, as previously announced."

These costs included estimated interest to be capitalised on monies borrowed to fund the projects.

In a statement, Exxaro said the scheduled start-up dates had not been changed.

"The group continues to work closely with Eskom to supply coal for the power station’s scheduled start-up of the first generating unit in the second quarter of 2012.

"The comments reported on were part of a broad panel discussion," the statement read.

The construction of the R9.5-billion brownfields expansion of Exxaro’s Grootegeluk mine was also progressing well, it said.

The mine would supply the power station with coal for over 40 years.

"The bulk of the front-end detailed engineering design has been completed and orders for long-lead capital items have been placed."