Eskom's R36-billion bill

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Eskom's R36-billion bill

Eskom’s poor financial position may worsen with a huge bill from contractors working on the Kusile Power Station.

The City Press has reported that a claim of this size – R36 billion – is normal on big construction projects to claw back money for unforeseen costs to get the job done.
 

Sollie

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Let me guess, R36bn bill but only R1bn of work done?
Speculation: R1bn work done, R35bn wasted expenditure while specs where changed, decision makers to important to sign off on progress - read a lot of red tape that makes a two day process a two month process. Add some guys in red berets causing labour disputes ... Yet the claimants have to pay salaries, hiring costs, ...? Additional security services? Buying new equipment where the old is burnt? Very plausible South African scenarios.

The City Press has reported that a claim of this size – R36 billion – is normal on big construction projects to claw back money for unforeseen costs to get the job done.
 

John Tempus

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R36billion, normal, 100years delay and still not completed project, remember guys this is normal procedure.

I guess it is also normal to eat your own brain.

Call me crazy but how about only paying them up to whatever progress they actually made to a functional final project.

If I order a car and receive all the parts without it being assembled then I sure as fk will not be paying a cent for it until it is assembled. Imagine we made this a default to any SOE project we might actually get the competent contractors to actually get the job after tendaaaaaaahs go out.
 

Johnatan56

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R36billion, normal, 100years delay and still not completed project, remember guys this is normal procedure.

I guess it is also normal to eat your own brain.

Call me crazy but how about only paying them up to whatever progress they actually made to a functional final project.

If I order a car and receive all the parts without it being assembled then I sure as fk will not be paying a cent for it until it is assembled. Imagine we made this a default to any SOE project we might actually get the competent contractors to actually get the jobafter tendaaaaaaahs go out.
You'd have no one actually deliver, since it's too high a capital cost to construct. These projects are supposed to be payout on achieving a milestone, so if an error happens, contractor has to fix before payout of that milestone.

Of course that never happened, plus companies hired to build Kusile/Medupi basically got destroyed by unions.
 

John Tempus

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You'd have no one actually deliver, since it's too high a capital cost to construct. These projects are supposed to be payout on achieving a milestone, so if an error happens, contractor has to fix before payout of that milestone.

Of course that never happened, plus companies hired to build Kusile/Medupi basically got destroyed by unions.
Yeh of course depending on the project then budget per milestone should be applied that is perfectly normal and if the contractor does a crap job you can boot them out at each milestone that is reached and replace them.

This is also why the R36billion make no sense, that seems to be some random final demand bill not including whatever amount of billions they already received over the last 10+ years of doing who knows what at the construction sites.

I suspect these guys were promised some hefty over the top billables and they now fear that Eskom will soon be in a position of not paying at all whether they finish the actual project or not thus wanting to start the litigation process before every last bit of liquidity evaporate from Eskom.
 

Sollie

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R36billion, normal, 100years delay and still not completed project, remember guys this is normal procedure.

I guess it is also normal to eat your own brain.

Call me crazy but how about only paying them up to whatever progress they actually made to a functional final project.

If I order a car and receive all the parts without it being assembled then I sure as fk will not be paying a cent for it until it is assembled. Imagine we made this a default to any SOE project we might actually get the competent contractors to actually get the job after tendaaaaaaahs go out.
Let's change you car to a house, your property. You set up the plans. You have to provide access. You promise the security of person and property. Now there are design issues causing delays, somebody has to come up with a solution, the work stops. Tick tock while people sit around. Some guys burn a truck or two, steal the cement.

Tbh, it's quite easy to see how this could happen. I'm also open to suggestion this could be gamed.
 

Gaz{M}

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Also, when you order highly specialised equipment (generators, control systems etc.) and large moving components, they can't just sit around for 5 years in the dirt. They need to be balance, maintained, oiled, rotated etc. continuously to stay usable.
 
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