Medupi to empower SA's economy

Lephalale – The completion of Medupi is expected to grow South Africa’s Gross Domestic Product (GDP) by about 0.35 percent a year, says President Jacob Zuma.

Medupi is a green-fields power plant comprising of six units rated in total of 5764MW installed capacity.

President Zuma has acknowledged that energy challenges faced by the South Africa in recent times has had a negative impact on the economy.

"The shortage of energy does not only cause enormous inconvenience to our people. It is a serious impediment to economic growth," said President Zuma on Sunday at the milestone official opening of Unit 6 of Medupi.

The GDP growth has contracted by 1.3 percent in the second quarter of 2015 after growing by 1.3 percent in the first quarter of 2015.

Challenges in the energy sector, drought conditions and a weak domestic demand all contributed to the contraction in the GDP growth in the second quarter.

Construction activities at the plant started in 2007 and the station is planned to be fully operational in 2019. Once completed it is expected to the fourth largest coal-fired plant and the largest dry-cooled station in the world.

Medupi was scheduled to be fully online four years ago, but construction has been delayed by labour unrest, leading to spiralling costs running into R105 billion. Unit 6 is expected to add at least 800MW to the struggling national power grid.

The unit was synchronised into the national grid in March and since then it has been undergoing tests.

"… we are pleased that Eskom now fully appreciates the need to move with speed to ensure that there are no further delays at Medupi."

Government, he said, is continuing to implement measures that will remove all binding constraints in the economy.

"Our major intervention is the Nine Point Plan that was announced in the State of the Nation Address this year. I provided an update recently to the nation on the implementation of the plan, which is informed by the National Development Plan," said President Zuma after touring the plant.

The plan is aimed at removing constraints and to boost business and consumer confidence, investment and economic growth.

Responding to criticism about why government took the decision to construct new power stations such as Medupi, Kusile in Mpumalanga, and Ingula in KwaZulu-Natal in 2005, the President said before democracy energy like education was structured through racial lines.

"It was only the democratic government that took a decision to expand power supply in 2005 so that everyone can have access to power,” he said.

Benefits of Medupi in Lephalele

The President also used his speech to detail some of the benefits of Medupi in stimulating local Lephalele region and province.

The town of Lephalale’s GDP has increased by about 95% per year as a result of the constructions, while creating jobs to about 18 000 construction employees and 2 000 supporting staff sourced mostly from the local areas.

This has contributed to the improvement of local skills. Further in all these projects, South African companies were prioritised for procurement and obtained 62% of the R75 billion of the contracts.

Other added benefits of the Medupi project included skills development as well as the investing in excess of R2.3 billion in infrastructure as well as socio-economic development initiatives in Lephalale.

With regard to human settlements, Eskom built 995 houses and bought 321 flats at a cost of R1 billion in the Lephalale area.

Eskom acting CEO Brian Molefe said the unit will enable the utility to supply South African homes and businesses and empower economic expansion to millions.

Molefe also announced that since the start of the construction - one employee - William Masilela - died while working on the project.

Eskom said Unit 5 at Mudupi will be completed in early 2017, while the last unit will be completed between 2019 and 2020.

"We will shift mountains if there needs to be in order to meet the target,” said Molefe.

Currently the total cost of Mudupi stands at R105 billion.

Public Enterprises Minister Lynne Brown said thou delayed, the legacy of Medupi would be felt by South Africans many years after it is completed.

”Medupi’s legacy will be with us for a long time; lessons will be taken from Medupi and applied to Kusile Power Station in Mpumalanga."

Also present at the launch were Public Works Minister Thulas Nxesi, Economic Development Minister Ibrahim Patel, Energy Minister Tina Joemat-Pettersson, Eskom board chairman Ben Ngubane as well as other Eskom top executives.