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New power station much pricier

Dec 01 2009 07:34 James-Brent Styan

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Pretoria - The cost of building Medupi, the new coal-fired power station in Lephalale, is now R124.42bn. Or so says National Treasury.

But Eskom insists the price ticket is still R100bn.

The utility is unable to explain why Treasury says the cost has risen by R25bn, and on Monday evening it again insisted that Medupi's budget remained at R100bn.

In a perplexing email, Eskom simply said that the original costing had not changed and could not increase as contracts were awarded, since they had been approved with the increases already included.

The document with the figure of R124.42bn is, however, on Treasury's website.

The latest figure means that the cost of Medupi has increased R100bn in the past three-and-a-half years.

The power station was originally approved in July 2006 with a budget of R26bn.

Late on Monday Eskom was still busy with its revised tariff application that had to be submitted to the National Energy Regulator (Nersa) by midnight.

Eskom is now expected to apply for a smaller increase than the 45% a year over the next three years it originally requested.

The power utility previously warned that if the approved tariffs were too low, some of its capital projects could be delayed.

A second coal-fired power station, Kusile, which is being built near to Delmas in Mpumalanga, will probably have to be deferred if Eskom receives a lower tariff than the one for which it initially applied.

- Sake24.com

For more business news in Afrikaans, go to Sake24.com.

 
 
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