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MEDUPI POWER STATION – CONSTRUCTION DELAYS.
Medupi coal fired Power Station is the slightly older sister of Kusile, previously discussed on this site (16th July 2016). My motive is, that is seems that neither the South African Government, the Department of Energy, nor Eskom have an appetite to embark on a Nuclear Energy program until such times as these two Coal Fired Power Stations are up and running, or nearly so. I have established that Kusile is unlikely to be operational before mid-2021. I am now going to attempt to determine the earliest date which we can expect Medupi to be fully operational. It is now, at least, 4 years past its original estimated completion date.
To achieve this goal, I decided to take a trip the Ellisras (Now called Lephalale). Ellisras is 330 km, by road from Fourways. Lephalale Mall is actually a new township, which owes its existence to the construction of Medupi Power Station. When one refers to “Lephalale Mall”, it comprises of a complete new town, approximately 9 square kilometres in extent, and contains one large Mall, a smaller one, and an Industrial Area.
Most of the houses were built to house the Medupi workforce, and associated services personnel. This is over and above the old town of Ellisras, which has quadrupled in size since the Medupi site commenced construction. Additional new housing complexes were also built on both sides of the road joining the old Ellisras Town, and the new Lephalale Mall. The whole area is booming. Lephalale Mall is 5km west of Ellisras, and Medupi is a further 15km.
One of the first things I noticed when entering the Lephalale Municipal area, was that it is an exceptionally well kept municipality. Even people picking up rubbish for several kilometres along the roads leading out of town. This prompted me to ask a black traffic officer for advice on finding suitable overnight accommodation for two nights. His advice was more or less spot on, and I negotiated my spot for 2 nights.
The first order of business was to check out the workforce, and work conditions at Medupi construction site. Without counting, I estimated the workforce at around 14 000, based on my counting method at Kusile. There was 100 plus 48 seater, and 84 seater articulated busses, and a near-enough 20km of bumper-to-bumper cars, pickups, and minibuses on the road heading east to Lephalale Mall, and Ellisras, and a smaller proportion heading west to the location of Marapong, (a road trip of 13 kilometres) at knock-off time.
Marapong is around 3, 5 square kilometres, and boasts a hospital, single quarter’s hostel, and technical college. There is also a well-made bicycle path on both sides of the road leading out of Marapong. When entering Marapong, one initially encounters good quality brick houses – I would guess as a result of Matimba and Medupi construction sites – for a kilometre or so, but further on it degrades to mediocracy, and later into shacks.
It was interesting to note, that unlike Kusile, pedestrian workers leaving site by bus, were required to de-bus inside site, pass through security, and then re-bus again outside site. Knock-off time was staggered between 16h00 and 18h00. There was no mention of a night shift. The same scenario, but in reverse, came into effect between 06h00 and 08h00. All the workforce I observed appeared to be in a business-like frame of mind, healthy, and in good spirits. As the workforce comes from all over the country, a monthly, long weekend system, is in operation (Friday, Saturday, Sunday and Monday), to allow regular home visits. Surprisingly, there is no Air Service to Johannesburg, to allow for this. I would say the workforce has very little to complain about at this point in time.
Strikes: Up until about two years ago, strikes were fairly common place – for various reasons. The most common reason was, that if one contractor’s staff, or group, were given a raise or bonus, other contractor’s staff, or other groups went on strike in demand for the same raise or bonus – Logically Illogical. It came to light, that when these workers returned to work, it was not always the same workers, which went on strike in the first place. At the same time it was assessed that there were too many workers on site anyway. This is understandable, because at that time one of Medupi’s draw-cards was “Job Creation”. I think there was around 17 000 people on site, and were definitely getting in each other’s way. At that point (Two years ago), site management’s policy required that returning strikers, needed to reapply for their jobs, and in some cases, only by internet. This policy tended to thin the workforce, and at the same time, up the academic level somewhat. The dust has now settled around these industrial issues, and by all accounts, the current workforce is now very willing and able, and it looks that way as well.
Now looking at progress: The first significant feature I noticed about the Medupi site, is that, compared to Kusile there is only about 30% of the equipment still in the laydown areas that looks like it still needs to be installed into the six boiler units. This is based on straight forward observation, and means 70% of the equipment is already installed to date. To check-balance this observation,
I looked at the six units themselves – with the following estimates, and some inside information: – Unit 6. 97% complete. Unit 5. 85 % complete. Unit 4. 68% complete. Unit 3. 50% complete. Unit 2. 52% complete. And Unit 1. 40% complete. Giving an average of 65, 5% complete. Now coupling this with the equipment estimate of 70% you get around 67, 8% complete.
Medupi has some advantages: over Kusile. The workforce has a slightly less daily commute distance. The workforce’s industrial problems appear to be a thing of the past. It has a railway line to the south, at its doorstep. The out-going transmission lines are in place (from the long existing Matimba Power Station, adjacent). There is already a reliable water supply from the “yet to run dry” Mokolo Dam (even now at 70% full), about 40 km to the south, on the Mokolo River, running from beyond Vaalwater. And a definite source of fuel coal – but.
The coal supply will definitely come from Exxaro’s mine just to the north of Medupi Power station. This mine also provides coal to the existing Matimba Power Station via conveyor belt, which has been working reasonably well for decades. The 7km overland conveyor from Exxaro’s mine to Medupi’s Stacker – Reclaimer area, is complete and operational. Although it was not running one day, but running the next day.
The reason for this is that Medupi is not yet ready to burn coal (because of construction delays), but are contractually obliged to buy coal from Exxaro. To partially remedy this stalemate, Medupi has established a small, strategic coal stockpile at their end of the conveyor, near their coal handling equipment. Medupi has also established a much larger temporary coal stockpile, 5 km, by haul road, west of their coal handling equipment. I crudely measured this huge temporary stockpile to be well in excess of 15 million tons of coal. Enough to run all six units of Medupi for a period of 8 / 9 months. If and when, all six units are fully operational. This huge temporary stockpile appears to have been trucked from conveyor’s end to stockpile. And I assume, needs to be loaded, trucked and tipped, back a Medupi’s coal handling equipment again, at some point in time. It is hard to see the economics of this procedure. To transport 15 million tons of coal 5 km, knowing full well, that you need to bring it 5km back again, is an enormous cost added to the cost of delayed completion. I suspect it would feasible to construct an additional 5 km of conveyor belt, to bring it back again to Medupi’s coal handling equipment. Thinking further about this – why not build the extra 5 km of conveyor now. It can be used both ways in the future ? ?
Worse still, under this regime, the stockpile will continue to grow until Medupi is fully operational, and then some. Medupi must certainly re-negotiate their deal with Exxaro. I do of course realize, there will be times when the overland conveyor will be stopped because of maintenance work, and or breakdowns, but this is extreme, and seems more to do with contractual penalties, than strategic planning. Infact, an enormous blunder. Although this scenario is costly, I doubt it will directly cause time delays. It should be noted, that Matimba also maintains a strategic coal stockpile, but of more reasonable proportions.
All things considered, Medupi is in better shape than Kusile, in terms of associated infrastructure, and various aspects of the work that are completed. There is one out-standing item that could cause possible delays, and that is the installation of the Flue-Gas Desulphurisation (FGD) equipment near the bottom of the chimney stacks. I have heard this installation can be troublesome. See flanges (painted red) on northern chimney stack ready to accept FGD equipment.
Conclusion: – On the face of it, Medupi is mathematically 67, 8% complete. However the surrounding infrastructure appears to be well ahead of that, so I suspect we could call it closer to 73% complete. But, the excess coal supply has the potential to create contractual / financial difficulties, which could impact on cash flow, additional construction (of overland conveyor), and hence construction progress. Secondly, the Flue-Gas Desulphurisation Unit also has the potential to slightly delay construction progress, due to its troublesome nature. Thirdly, the incline conveyor coal feeds to each two units still has an indeterminate way to go, so I am pulling the estimate back down to 71% complete. We can say that 71% of the work has been completed in 9 years. Therefore 100% of the work will be completed in 12, 7 years. That is another 3, 7 years from now. Some serious forward planning will be required, regarding cash flow, and critical construction path work. Medupi is unlikely to be fully operational before the first half of the year 2020.
— — RIDE HARD, SHOOT STRAIGHT, AND SPEAK THE TRUTH —–