Power utility Eskom said on Wednesday it had brought Unit 1 of the Kusile power station into commercial production just under a year ahead of schedule. The entire Kusile project, however, was now twice as expensive than initially estimated and four years behind schedule.
Amid revisions of expected completion dates, Kusile remained linked to the embattled leadership of the utility.
Eskom said the power station would add 800MW to the grid. The utility revised timelines for its power stations in 2015, with Kusile’s cost rising to R160bn from R80bn.
The construction and optimisation of the unit was ahead of its scheduled commercial operation date of July 2018 and indicated the utility had learned from previous build projects‚ Eskom interim CEO Johnny Dladla said in a statement.
Cost overruns at Kusile had come with other problems, including labour disputes and allegations of corruption — among which are allegations that suspended acting CEO Matshela Koko irregularly ordered the removal of some senior managers and contractors from the Kusile project.
Eskom has also faced cost pressures partly due to the expenditure on the project‚ which has led it to push for significant electricity tariff hikes.
Some analysts have warned that Eskom’s push for higher tariffs was a major risk factor for inflation and could derail Reserve Bank plans for further interest rate cuts.
Meanwhile, Public Enterprises Minister Lynne Brown on Wednesday demanded an explanation from Eskom by Thursday afternoon on the state of its relationship with Trillian Capital Holdings.
On Monday, Eskom admitted it had lied in respect of the R1.5bn payment made to the then Gupta-linked company.
Trillian has reportedly cashed in on inside information for access to large procurement deals from the utility. Eskom has reportedly paid millions in other contracts to Trillian either outside of procedure or without any concurrent paperwork.
Trillian is at the centre of allegations it helped rig bids for Eskom projects, including using cost overruns at the Kusile power station project.