South Africa's Eskom Appeals Nuclear Tender Verdict
A contract award to upgrade the Koeberg nuclear plant is being appealed. Photo: Eskom
South Africa’s State-owned power utility Eskom has an appeal at the Constitutional Court to challenge a Supreme Court of Appeal ruling stopping the $315-million nuclear refit contract at the Koeberg Nuclear Power Plant, which had initially been awarded to French firm Areva. Areva completed construction of the plant in 1984.
The Court of Appeal ruling followed an appeal by U.S.-based Westinghouse Electric Co.’s Belgian subsidiary Westinghouse Electric Belgium, challenging the award of the contract to Areva. The contract entails designing, manufacturing, and installing six steam generators in the 1,840MW-power plant’s two reactors, which are Westinghouse-licensed.
Eskom says the current steam generators, which were supplied by Areva, are prone to “granular stress corrosion cracking.”
The utility’s spokesperson, Khulu Phasiwe, said in an emailed response, “Eskom has lodged the appeal at the Constitutional Court and we are awaiting the court’s decision on the matter.”
Phasiwe also confirmed that Areva “has already built 50% of the steam generators required.” The generators are being manufactured in China under the supervision of Areva for delivery in 2017 ahead of installation in 2018.
Westinghouse had told the Appeal Court Eskom had taken into account irrelevant considerations in awarding Areva the contract. The company said its bid was $8.8 million less than Areva’s and its supplier development and localization contribution, which was part of the tender criteria, was $8.9 million more than that of its French rival.
The court did not replace Areva with Westinghouse, but Judge C.H. Lewis ruled that Eskom should start the tender process afresh. “If Eskom still considers the criteria it wrongly took into account or to which it attributed double weighting as vital, it should include these among the bid evaluation criteria,” the judge said.
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The refit contract is part Eskom’s plan to generate 9,600MW from nuclear power by 2030 under South Africa’s energy build plan, the Renewable Energy Independent Power Producer Procurement Programme.
In December the South African cabinet approved the issuing of the Request for Proposal by the Department of Energy for the Nuclear New Build Programme but whose financing model will be determined by the response of the market to the RFP before it is approved and implemented.
Energy minister Tina Joemat-Pettersson said in late December that South Africa is eager to build a lasting nuclear energy legacy with the nuclear plan adding that “if we get this wrong, the country will suffer a legacy of compromise.”
