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The delivery of the first of six new steam generators by Areva last week to extend the life of Eskom’s Koeberg nuclear power plant reveals another scam at Eskom, perpetrated during the infamous leadership of Brian Molefe, Matshela Koko and the dubious Eskom board at the time. .
Based on a shorter three-month lead time, the R5 billion steam generator replacement contract was eventually awarded to French state-owned nuclear contractor Areva, which after running into financial difficulties is now controlled by the French national electricity company, Electricite dé France (EDF).
This followed a protracted battle in the High Court, Court of Appeals, and Constitutional Court in South Africa, in which Westinghouse (ultimately unsuccessfully) attempted to challenge Areva’s award of the irregular contract on the grounds that the alleged urgency life extension was deliberately devised by Eskom to improperly award the contract to Areva.
At the time Koeberg was built between 1976 and 1985, Framatome (Areva’s predecessor) manufactured the two 900 MW nuclear reactors and the six associated steam generators at Koeberg, using designs licensed from Westinghouse.
Both Eskom and Areva stated that it was absolutely critical for the safe operation of the power plant and for the security of the electricity supply in South Africa that the steam generators were finally replaced during the so-called “X23” outage at Koeberg in 2018.
This was cited by Eskom as the reason for awarding the contract to Areva, where a supposedly artificial three-month “float” in the Areva project plan was indicated as the deciding factor. This despite the fact that Westinghouse has met all technical and business requirements, with a lower contract price and a guarantee to meet the 2018 completion date under penalty of substantial penalties.
However, not everything has gone well for Areva in the execution of the project.
Areva is said to have experienced serious build quality issues with steam generator forgings in France. In view of the importance of project timing, to resolve these issues, Eskom and Areva agreed that the incomplete forgings would be shipped by air to China, where an Areva “partner” would complete manufacturing.
Apparently, each of the six steam generator forgings required the contracting of a Russian Antonov cargo plane (six flights in total) to get the forgings from France to China. However, according to an impeccable source, after taking a closer look at the forgings, Areva’s Chinese partner decided to scrap them and start over from scratch.
One can only speculate as to why it was not deemed more economical for Areva to take the Chinese manufacturer’s engineers to France to examine the steam generator forgings, rather than flying the six steam generators to China for inspection, before let them be discarded. in China.
A former senior nuclear executive at Eskom commented to this writer at the time that: “This was the most expensive scrap transportation in human history.”
Eskom has since confirmed to EE Business Intelligence last week that: “The forgings did not meet the expected quality standards and could not be accepted, so the contractor disposed of them on his own.”
According to Eskom, the contractual delivery date for the six steam generators was February 2018, and the contractual completion date for the replacement of the six steam generators was late 2019.
However, with all the delays in the project, including the restart of manufacturing the steam generators from scratch in China, delivery of the first three steam generators for Unit 1 in Koeberg will only start in September 2020, and those in Unit 2 are only scheduled for delivery in the third quarter of 2021.
Regarding the actual replacement of the steam generators, Eskom now says that: “The facility is aligned with the scheduled shutdowns for 2021 and 2022, respectively, for the two Koeberg reactor units (Unit 1 and Unit 2).” Eskom does not now mention the critical importance of completion in 2018, cited by Eskom at the time as the reason for signing a more expensive contract with Areva.
While not answering specific questions about cost overruns arising for the project, Eskom insists that: “The estimated cost of completion for the project is within the original budget approved in 2014.” Of course, this is not very useful, because the original budget approved in 2014 is not disclosed and may have been significantly higher than the contract price.
However, it seems clear that Eskom has in fact paid a premium for Areva’s replacement of the steam generators at Koeberg based on an alleged three-month shorter completion time, when in reality completion will be about three more years. .
It’s an old trick, but it clearly still works.
Now Read: Eskom CEO Andre de Ruyter Releases Explosive Report on Corruption, Nepotism and Victimization
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