Evidence surrounding Eskom surreal

TO DATE we’ve addressed the Eskom and Zupta debacles in all seriousness. Now we are forced to adopt an Alice in Wonderland attitude and put it into surreal perspective, the only view to fit the available evidence.

It all started with Eskom’s peculiar need to rid itself of corporate excellence, which was its hallmark until around 20 years ago, eventually the last man standing being an Eskom veteran, Brian Dames. He was persuaded to make way for Transnet’s master of non-development, Brian Molefe. And so began the modern Life of Brian era at Eskom, with apologies to the talents of Monty Python.

Just as the Pythonesque Brian wanted to overthrow the Romans, Brian II desired liberation of Eskom into the hands of his true masters, the Zuptas.

The liberation was a mammoth labour as this was the man incapable of effective scheduling of his mega coal export trains, such that drivers had to be rescued from shift changes in the bundu.

Unable to run a railroad, he then had to understand how a big building full of very energetic leprechauns (courtesy of the O’Flaherty period) could stuff electrons into the end of a big power cable. Eventually he realised that the secret to Eskom’s liberation was to convert the vital supplier coal mines into proverbial gold mines; never mind the need to generate power, as long as the pig-trough was full.

In total, the Eskom coal contracts are massive, as are the company’s construction contracts. R5 billion, one year’s loss at SAA, give or take the odd billion, is petty cash at Eskom – it doesn’t even pay for a replacement boiler at Duvha, that is if Eskom ever gets around to restoring that ruined asset to the country. So the SAA debacle is only a sideshow, almost a distraction, in the greater scheme of things.

The money-go-round at Eskom (R150bn turnover and two new power stations costing R250bn) is comparable to the country’s entire fiscus, well worth serious attention to divert a slice to the parasites while the nation prefers to watch Dudu Myeni imitate the antics of Hlaudi Motsoeneng at the SABC.

Another diversion is the R170 million contract let by the Department of Zero Energy (D0E) – on behalf of Eskom – for some extremely esoteric “work” on the unaffordable nuclear programme to be performed by another Zupta acolyte, one of the Reddy family.

It just so happens that the Minister of Zero Energy is a member of the same harem as Myeni and also dances to the palace band. Nevermind the D0E’s utter inability to compile an effective integrated resource plan and to guide the country towards diversification of energy sources, such as Grand Inga and imported natural gas. If you seriously thought that this was the D0E’s job then join the Mad Hatter in his illusions.

Meanwhile, back at the coalface, we get down to the serious money, where R0.5bn can be handed over as an advance payment on coal delivery, so long as you’re a Zupta. It took some serious shaking down to get a competent Glencore to leave the Optimum Mine: Brian II created the stratagem of penalising Glencore R2bn for delivering “substandard” coal to Hendrina, just so that Zuptadom could pass GO and collect the aforesaid R0.5bn.

That was merely to provide cash flow for the star in the emperor’s crown, the supply of enriched uranium fuel to the future nuclear power stations, originating from a gold/uranium mine also in the Zupta stable. And that, folks, is the real justification for the nuclear programme – nothing at all to do with the country’s real needs, which are education and healthy civil activism.

Those needs remain figments of fertile imagination while we all allow Zuptadom to flourish, even if the architects have bolted down an Arabian rabbit hole.

A few days ago Brian II had to submit to parliamentary examination in which he tried to explain that the reason for Eskom taking three times longer than the norm to build a new power station was the late order placement. Really?

And, of course, he avoided admitting that the reason for years of load-shedding, and a humongous diesel bill (which made some cronies very rich), was simply his continuing inability to supervise maintenance of power stations.

Nevermind insisting on giving away a power station’s entire output to aluminium smelters, but that takes care of the cronies with shares in South 32, the successor to BHP Billiton’s plainly illicit deal, which probably inspired the Zupta plan. ROGER TOMS PROJECT MANAGEMENT FOR SOUTH AFRICA’S PROPOSED NUCLEAR ENERGY PROGRAMME HOUT BAY

Going nuclear needs a coherent plan

I refer to Dr Kelvin Kemm’s lucid article in Business Report on September 8, “Nuclear power is the only sensible way to go” and would like to expand upon one important matter to which reference briefly was made in the article.

Kemm emphasised the need for good project management to prevent cost overruns and schedule delays and it is upon this aspect that I should like to comment and to make some suggestions.

For the nuclear project’s being considered by the South African government it would be necessary ab initio to form a project management team to advance and protect the owner’s interests. The owner team would not commit the folly of undertaking the project management function itself and one of its first tasks would be to appoint not only the nuclear vendor, but also an Engineering, Procurement and Construction Management (EPCM) contractor to be responsible for the entire project other than the nuclear island.

The owner team would oversee at the macro level the project management performances of the vendor and the contractor, applying the principle of divide et impera, divide and conquer.

This EPCM contractor would design, procure, construct and commission the units and infrastructure outside the battery limits of the nuclear island and the ground works within these limits. For this, the contractor would use certified information from the nuclear vendor who, in turn, would be responsible for all the above ground work within its area.

The owner team would contain professional persons spanning the project management function and all engineering disciplines, and these resources are available in South Africa.

The team would mandate its project management requirements to the nuclear vendor and the EPCM contractor before their appointment, namely at regular intervals to provide the owner team with objective information to allow, inter alia, the determination of their compliance with the stipulations of the budget and schedule. This would permit the owner team from an early stage of the project to ascertain the likelihood of a budget or a schedule deviation and to enforce effective remedial action while there is still time to do so.

Recognition of these deviations only at a late stage of the project invariably results in a fait accompli and an inability to redress an unfavourable state of affairs.

The vendor and contractor in turn would be required to enforce these project management requirements upon any and all subcontractors subsequently appointed by them.

Another compelling argument for the early appointment of an owner team would be the necessity to ensure that the social foundations for a large project are in place.

By way of example, I mention the Sasol Two project at Secunda in the late 1970s.

Before any work on the plant began, Sasol commenced building accommodation for the hundreds of workers, expatriates, managers, engineers and artisans who would be employed there.

The first process facility to be commissioned at Secunda was the sewage treatment plant for this accommodation. The houses subsequently were sold to private persons once construction activities waned. All the project’s skilled artisans were sourced nationally and the total workforce numbered twenty-five thousand at the peak of construction.

Sasol also provided an amenity, the Sasol Club, at Secunda. The club included a restaurant and a theatre where amateur groups both from Secunda and from Johannesburg regularly presented shows. It was not too difficult to find these thespian accomplishments at Secunda due to the presence there of talented individuals from South Africa, Europe and America all with their own national characteristics. To an extent Secunda became a cultural melting pot.

The absence of these social foundations at the Thyspunt site would ensure the truth of the maxim – the devil finds work for idle hands to do.

I must state that the execution of the proposed nuclear energy project, from a project management perspective, would not be unduly complex.

The design and construction standards for a nuclear plant are understandably onerous, far more so than those for a conventional process engineering facility, but these exacting standards would not make the project management function, per se, unnecessarily complicated. Apart from the nuclear enclave, the rest of the facility is straightforward and no different from a traditional process engineering project.

Another early task for the owner team would be to specify that all pipe fabrication, to the greatest extent possible, be done at the Thyspunt site. It does not make economic sense for the pipe spools to be fabricated elsewhere and transported to the site. The chosen EPCM contractor would be required to set up this fabrication shop and also to ensure an adequate supply of coded welders.

The best way to supply these welders would be for the EPCM contractor to recruit suitable candidates from the local communities and to train them under professional supervision in a welding and fabrication school at the site.

These candidates would be guaranteed employment on the site after graduating from the school and would acquire the skills needed at Thyspunt and, for that matter, at any subsequent nuclear energy sites. The nuclear vendor would be asked to gauge the degree to which the piping for the nuclear enclave also could be fabricated on the site.

It would not be in South Africa’s longterm interests for welders from overseas to be recruited for Thyspunt and to depart with their skills once the plant has been commissioned.

An initial assignment for the EPCM contractor would be to survey the various routes to Thyspunt from the sea ports, airports and inland. These routes would have to be assessed for the ability of any bridges to carry heavy loads, headroom below bridges, turning radii to accommodate heavy equipment on long trailers and clearances below overhead cables (which may have to be raised). For the transport of heavy equipment over long distances suitable lay-bys along the routes would have to be provided for over-night stops.

All these would require collaboration and liaison with the several municipalities along the proposed transportation routes.

Finally, the presence at Thyspunt of what effectively would be a captive workforce for several years should encourage a spirit of entrepreneurship among the local communities in creating service industries to provide personal needs not otherwise available.

David Milne is a professional engineer registered with the Engineering Council of South Africa and has been involved in the management of large projects in the mining, process and industrial sectors of the local economy for over thirty years. He was a founding director and is a Fellow of the Cost Engineering Association of Southern Africa and is a member of Project Management SA.

Rich Mkhondo is absolutely correct when he says what we need is an organised and more formal investment in tertiary education by all companies. We also need greater investment from our government.

As recently announced by the Minister of Labour, Mildred Oliphant, the Department of Labour has approximately R123bn in its reserves invested through the Public Investment Corporation (PIC). These monies are supposed to be used to ensure that there is some sort of job creation in South Africa.

We all know and understand that the government does not create jobs, but merely creates an environment whereby jobs will be created by the private sector. The Department of Labour has failed us in this regard and it would be useful for it to take some of those monies invested in the PIC and spend it on education for those that can’t afford to go to university.

We obviously need to ensure that those who are going to be studying on these bursaries will be studying in the sectors that are needed by our economy. I believe that these sectors would benefit from the educational bursaries that could be put up by the Department of Labour.

I trust that the Ministry of Labour will see the benefit of using some of its fallow monies being beneficial to the universities and the education of our next generation. MICHAEL BAGRAIM MP LABOUR SPOKESMAN DA

Was Bell’s DRC team local or from SA?

Although I read the Bell article in Business Report carefully, I could find no reference to whether the management team of Bell Equipment in the Democratic Republic of Congo (DRC) who incurred a R60 million loss were in fact local (DRC) employees or staff seconded from South Africa. Perhaps they should name the management team that were dismissed as that would solve the puzzle.

Over the years a major multinational oil company withdrew from just about every African country that it operated in because they were not able to maintain the correct processes and company procedures, despite extensive training and were wary of civil claims.

No wonder we battle to attract foreign investment. TONY BALL DURBAN

Why land claims are in such a shambles

As a property valuer I have taken a keen interest in the land claims process going back to the December 31, 1998, deadline for claims.

In 2012 I wrote a widely circulated article detailing with many examples how this 1998 deadline had been ignored by decree of then President Thabo Mbeki, who sanctioned the lodgement of thousands of late claims, all technically invalid.

We now hear that just short of 80 000 claims were lodged, but my guess is that maybe half of these came in after the deadline. Of course this is now old hat with the deadline being extended, but what is interesting is how Mbeki believed that regulations were made for man, not the other way around.

In just one example of many, the KwaZulu-Natal commissioner accepted and published a claim by a local community that their communal land had been taken from them after the relevant year 1913, when this land had been surveyed and registered in ownership of a white settler in 1859! All this able to be verified by the commissioner just a few blocks away from his office in Pietermaritzburg.

During all this, the various commissioners’ offices in the country were in a shambles, due in part to an admitted “lack of capacity of staff”! How marvellous to hear this from our government: this could apply to our 253 municipalities.

Of course, any office would be in a shambles if thousands of claimants all arrived on New Year’s Eve, to get a December 31 date stamp on their application, but we know this never really happened, as a forensic examination would show. NORMAN E MAURICE SCOTTBURGH, KZN

And so began the modern Life of Brian era at Eskom, with apologies to the talents of Monty Python.