Eskom Plant Closure Worsens Power Cuts Amid Nepotism Concern

Eskom Holdings SOC Ltd’s own mishandling of a repair contract led to the closure of its Camden power plant, a move that worsened power cuts by South Africa’s near-monopoly electricity provider, the company said.
In its first detailed explanation of the shutdown, Eskom said the initial 635mn rand ($38mn) contract expired in 2018 amid questions about conflicts of interest and environmental regulations. With the work delayed, Eskom shut the 1,600-megawatt facility in April, saying the dam where it stores ash from burning coal was at risk of bursting.
Eskom this month slashed the electricity supplied to South Africa by between 1,000 megawatts and 2,000 megawatts for a week. Power cuts, known locally as load-shedding, have hindered economic growth since 2008.
“Load shedding is primarily as a result of high levels of unavailability of generation stations, including Camden,” Eskom said in a response to questions.
Eskom, which has debt of about 454bn rand, is mired in corruption allegations, many of them related to contracts for the maintenance and construction of power plants. Numerous allegations have been aired at a state commission of inquiry.
The first contract to build an ash-handling plant and dam at the site was initially awarded to Rula Bulk Materials Handling in 2016. But that raised the conflict of interest issue.
Danie Odendaal, an Eskom general manager, was found in an internal probe to have signed off on a technical review used in the tender won by Rula, where his brother Roelf is a shareholder and managing director, a person familiar with the findings said. Danie Odendaal had declared a conflict and shouldn’t have participated in the decision, the person said. Danie Odendaalcouldn’t be reached for comment.
“Danie Odendaal remains suspended and will be going through a disciplinary process,” Eskom said. “The details are matters between employer and employee.”
The delay was worsened after Rula said the drawings for the project were its intellectual property, forcing the new contractor, Wilson-Bayly Holmes-Ovcon Ltd, to redo the design. Eskom also said Rula breached the water-use license by building a site office on a wetland that had to be removed.
Roelf Odendaal rejected Eskom’s explanations, saying his brother played no role. The delays were “caused by a lack of decision making” by Eskom, he said.