Photo by: Duane Daws
State-owned electricity utility Eskom reported on Thursday that it had terminated contract negotiations for the rebuild portion of the Duvha Unit 3 boiler recovery project after the “supplier was unable to meet the conditions precedent to enable agreement on the contract”.
Eskom did not name the counterparty, but said negotiations had been terminated on June 27 and that a new commercial process would be initiated for the demolition, engineering, procurement and construction scope of the works.
“[The] process is under way. It is expected that Eskom will go to the market soon,” the utility told Engineering News in response to questions.
The termination announcement came as a surprise, as it was confirmed only days after Eskom indicated that the contract negotiations should be concluded before the end of June in a statement released to dismiss suggestions of irregularities.
It also follows a previous indication that Eskom was aiming to appoint a contractor before the end of March – this, after substantial delays in concluding an insurance process that arose after the unit was shut following a catastrophic explosion on March 30, 2014, caused by “over pressurisation of the boiler furnace”.
However, in a response to questions posed by Engineering News, Eskom asserted that the termination was based “purely on conditions precedent not being met” and had nothing to do with reports of contract irregularities.
It would not be drawn, however, on the outstanding conditions, saying only that it was “not in a position to disclose this information due to market sensitivities”.
Eskom also refused to comment on the implications for the insurance payout, confirming only that “there are deadlines which are being met”.
Suppliers had been appointed for the structural assessments and repairs scope of work and Eskom claimed there should, thus, be no delay to the overall schedule for recovering of the unit.
“Based on the current works schedule no additional delay is foreseen, as the structural assessments and repairs scope is on the critical path. The works are expected to continue for the remainder of 2016.”
The structural assessor was identified as WAH Engineering (DRA), while Bilfinger Steinmüller was named as the structural repairer. The scope of work involved structural assessments for the main, primary and secondary steel structures, as well as necessary repairs to enable safe commencement of demolition work.
The utility indicated previously that it expected Duvha Unit 3 to be fully recovered during its 2019/20 financial year.