Medupi contractors blast Eskom
Lephalale – Eskom took them from bad to worse.
This is according to four small contractors for whom
building contracts at Eskom’s Medupi power station outside Lephalale meant
bankruptcy rather than prosperity.
Last year Sake24 reported that prospects of at least three
years’ construction work at Medupi rapidly went awry for Lezmin 3453, TT61,
Baarata and Zin Zi Construction.
The contractors believe they were forced into unworkable
According to Johan Strydom of Lezmin, they each had to
provide workers to do the bricklaying and plastering for the structure housing
the coal burners. The contractors had to pay the wages and make additional
payments for, inter alia, unemployment insurance and employees’ tax. The main
contractor, the Medupi Power Station Joint Venture (MPSJV), which is led by
Murray & Roberts, subsidiary Concor, and Grinaker LTA, subcontracted the
construction work to them and was itself to have provided the material.
The biggest problem was that the four subcontractors had to
pay their workers by the hour, but MPSJV paid them per square metre of
The subcontractors were frequently unable to access the
construction site because of factors outside their control and often lost a lot
of money because they still had to pay the workers.
It wasn't long before they couldn't pay their workers. MPSJV
was prepared to advance the money, but when the contractors tried to claim back
for their costs, their calculations and those by MPSJV did not agree.
Baarata’s Martin Nel says he has shelled out about R26m, but
has been paid only R9m.
All four left the site last year and then instituted legal
action against MPSJV and Eskom.
In November, after Sake24 had reported on the situation,
Eskom however apparently intervened and appointed an independent auditor to
investigate what had gone wrong.
The four contractors provided all the information that the
Eskom spokesperson Hilary Joffe sent an email to Sake24 in
December confirming that the results were expected to be available by the end
of the month.
Shakes Ndou of TT61 says all indications are that the report
has long been finalised and that the results would be favourable for him and
his three colleagues. Since then every attempt made by the contractors to get
sight of the report has failed. Joffe has also ignored a number of enquiries by
Sake24 in this regard.
Shamina Mulla of Zin Zi says she feels betrayed by Eskom’s
attitude. “We were so grateful when Eskom intervened, but we now realise it
made fools of us.”
The contractors say had they not waited for Eskom’s report,
they could have sooner, when they were in a
better financial position, continued with legal action. This are now in
a bad way and in terms of the court rules MPSJV is demanding a deposit of R250
000 from each before the case can continue.
Last week Ndou approached the Presidential Hotline and also
handed a letter to the office of Brian Dames, chief executive of Eskom. Sake24
is in possession of an email of a letter in which Karen van der Byl, Dames’
personal assistant, acknowledges receipt of it.
MPSJV previously said the small contractors did not
understand the claims process. It said they regarded it as the difference
between the loss they showed and the profit they believed they should have
made. In a written statement MPSJV claimed to have been particularly
forbearing, but that there was point at which subcontractors had to accept
For more business news in Afrikaans, go to Sake24.com.
So SMEs are trashed again! I am beginning to see how there is a real need to advise these pioneers when they come to sign contracts!
Do business with Eksdom at your own peril.
CONTRACTS MUST BENEFIT ALL PARTIES AT THE SAME TIME ESKOM MUST ENSURE THAT THOSE CONTRACTORS UNDERSTAND AND FAMILARISE THEMSELVES WITH THE CONTENTS OF THE CONTRACTS TO AVOID SIGNING THE CONTRACTS UNDER THE \ UNDUE INFLUENCE\ AND AGAIN GIVEN WEATHER CONDITIONS SURROUNDING THAT AREA \ SQUARE METER PAYMENT SYSTEM \ WAS NOT THE MOST APPROPRIATE ONE BEARING IN MIND THAT THOSE PEOPLE ARE EMERGING CONTRACTORS. EVEN CONTRACTORS THEMSELVES IN FUTURE THEY MUST AVOID SIGNING CONTRACTS WHITH THEIR EYES BEING CLOSED.
I'm just wondering if anyone has heard of the Turbo Element, I think that's what they call it. They claim to save 40% of each geysers electricity usage, without affecting your geyser use. Does anyone know if this really works?
Energy is energy.
Two methods to save energy for geysers are:-
1. solar which is energy from the sun and is basically free after capital cost is recovered (+/- R15000 & 5 years). Disadvantage - you do need the sun and overcast days do not generate much energy. Advantage - hot water even if power is off.
2. Heat pump - similar to an air conditioner system and generates more than twice the energy than it consumes, again capital cost has to be recovered,(+/- R15000 & 5 years). Advantage - it costs i kWh for every 2 kWh of energy required to heat the water. Disadvantage - not power no hot water. Combination of both is probably the best option.
Dear friends, those Constractor down fall was due to them not know the industry, and they were doing 150 bricks a day, no contractor will make money if their breakeven level was based on 600 or 650 brick per day per bricklayer. TT61 went down because he failed to make payments to SARS, nothing to do the the Contractor or Eskom. The other 3 paid the bricklayers at 50% or more of the required minimun wages as stipuate in the PLA. Thus if they failed in achieving 650 bricks per bricklayer per day, they would run at a loss. That error Mr Strydom admitted himself.