Outgoing Eskom CEO Brian Dames has confirmed that the State-owned utility has “exercised its contractual rights” by appointing Siemens to replace Alstom as the supplier of the boiler protection system (BPS) at the R105-billion Medupi power station project, under construction in South Africa’s Limpopo province.

The BPS forms part of a larger control and instrumentation (C&I) package for which Alstom remains responsible. In fact, Alstom South Africa’s Riccardo Pierobon described the BPS as a small part of its overall C&I contract, adding that the other systems were “performing to specification”. The French multinational is also installing the turbines and generators, which represented the “vast bulk of Alstom’s work on this plant”.

In an interview with Engineering News Online, Dames insisted that the change to the BPS contract had not resulted in a revision of Eskom’s guidance that Medupi’s first 800 MW unit, or Unit 6, would become operational during the second half of 2014. “As of last week when we sat down as a team and looked at the schedule, it was still before the end of the year,” Dames said, while refusing to provide a more precise timeframe.

He also dismissed suggestions that his departure, which was announced on December 5, was in any way linked to speculation that the problems at Medupi were worse than had been communicated. “We have gone through assessments that we had others do for us and which confirmed the issues that we know and have communicated.”

In July last year, Eskom announced that Unit 6 had been delayed from its already deferred start of the end of 2013, with the postponement attributed partly to the failure of BPS factory acceptance tests, as well as problems relating to boiler welds and persistent labour strife. In early December, Eskom confirmed it was interrogating a “suitable contingency plan” should Alstom fail to meet contractual milestones, saying the action was being taken to mitigate schedule risks.

Dames did not disclose the new BPS contract value, or the financial implications, saying only “there are obviously going to be lot of legal issues around this”.

“Our view is that we are exercising our rights under the contract, that Alstom is accountable to deliver the C&I system for us and that, under those rights, we will make sure that we are protected both in terms of our risk and the cost.”

Eskom and contractors across the utility’s various construction sites had made claims against each other and Dames predicted that the legal issues surrounding the current build programme were likely to continue until “well after these stations are commissioned”.

“Contractors have put in claims and Eskom will put in massive claims against contractors and the legal issues are going to continue,” he said, adding that Eskom is of the view that the high-profile delays relating to the boiler and the C&I system where “surely, a contractor issue”.

Pierobon refused to comment on whether Alstom planned to challenge the BPS contract termination, reiterating only the group’s commitment to the successful completion of the Medupi project. He added, though, that the system being supplied for Medupi had been tried and tested and was in operation on other plants such as Belchatow, in Poland, and Claus C, in the Netherlands.

Alstom remained responsible for the other elements of the C&I system at Medupi, including the balance-of-plant operations, the field instrumentation and the unit-control system. “Within that unit-control system we have asked Siemens to do the boiler protection for us,” Dames outlined.

Eskom had not yet decided whether it would implement a similar BPS solution at the Kusile plant, which is under development in the Mpumalanga province. However, Dames said a decision would be made in the not-too-distant future. Hybrid control solutions were in place at “many of our others sites”, but it would be critical that the interface requirements are met by each supplier.

Pierobon said Alstom continued to work to meet Eskom’s requirements and “we hope that the issue of interface will not delay implementation”.

Besides the boiler-weld and C&I issues, labour relations remained a key priority, Dames said. Officially four months of activity were lost in 2013 owing to unrest, but in reality it took even longer for the strike-prone site to be remobilised and there were still sporadic reports of disruption. “The partnership agreement is now in place. But that doesn’t mean everything is fine, because pretty soon we are going to go through a phase of [demobilisation], as many of the work packages come to an end.”

Dames acknowledged he was leaving at a time when Eskom faced a number of construction, operational and financial challenges. But he argued that there was not “going to be an easy time to leave” in the near future, owing to the fact that the utility was in the middle of what was likely to be a long-term process of remedying fallout from policy decisions made in the late 1990s.

“It took ten years for those policy decisions to emanate as a crisis and it’s going to take ten years to really deal with it. So, there was never going to be a right time,” Dames avers.

“As I have indicated, I would like to have a life, quite simply – I would like to have a life and that certainly means that I would like to have quite a decent balance,” he added. However, Dames had no retirement plans, disclosing that he is weighing a number of interesting opportunities in the energy sector.

A board-led process was under way to select a successor to Dames, with chairperson Zola Tsotsi having confirmed that both internal and external candidates would be considered. A short-list of candidates would be handed over to Public Enterprises Minister Malusi Gigaba for a final decision, which would also require Cabinet concurrence.

Both Tsotsi and Gigaba had indicated their preference for a handover period. However, Tsotsi acknowledged that this might not even be possible and revealed that an existing executive had been earmarked to take up the position in an acting capacity should the appointment of a permanent CEO not be possible by April 1, 2014.