DEPARTMENT: PUBLIC ENTERPRISES
REPUBLIC OF SOUTH AFRICA
NATIONAL ASSEMBLY
QUESTION FOR WRITTEN REPLY
QUESTION NO.: 834
DATE OF PUBLICATION: 23 April 2012
834. Mr L W Greyling (ID) to ask the Minister of Public Enterprises:
(1) Whether the original cost of R32 billion for the Medupi Power Plant was
in line with the average cost per megawatt of coal fired power stations; if
not, why not; if so, what are the relevant details;
(2) Whether Eskom insisted on a change in specifications that resulted in
the cost escalating to R92 billion; if not, what are the reasons for the
escalating cost; if so, what justification was put forward for this
increase in cost;
(3) What is the expected total cost for the Medupi Power Plant upon
commissioning? NW1010E
Reply:
(1)The Medupi Power Station Project to construct a three unit station of
794 MW each as a critical pulverised fuel plant with a Flue Gas
Desulphurisation (FGD) plant was approved in December 2006 at a cost of R32
billion. The budget for the project remains in line with international
benchmarks such as the Electric Power Research Institute (EPRI) of the USA,
Lazard and the International Energy Agency (IEA) in France.
The table below shows the 2011 renowned benchmarks (Source: Eskom Annual
Report).
[pic]
(2) The Integrated Strategic Electricity Plan (ISEP) of Eskom called for an
increase in supply requirements. The approval of R92 billion was for a six
unit station in comparison with a three unit station that was estimated at
R32 billion in 2004 monetary terms. In addition, the difference in phasing
of the capital expenditure on the units, supporting infrastructure
requirements such as roads, rail and housing, transmission integration,
regulatory requirements and market conditions had an impact on the cost
estimate variances. The specification of the project has not changed but
the configuration has changed in line with original plans.
(3) The current cost to complete the Medupi Power Station is estimated at
R98.9 billion excluding interest during construction, but including
escalation and transmission integration costs.