SA nuclear: calling all contractors

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27-11-2013
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Moneyweb
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Announcement expected soon.

An announcement about South Africa’s nuclear programme is imminent. Building a nuclear power station will be such a huge project that “every contractor will work on it.”

This is according to Willie Zeelie, engineering and construction executive at Group Five, who spoke to reporters at the group’s annual media day. It is not clear whether such an announcement will be made before or after the general election next year, but the fact that a government delegation is currently visiting different countries to meet with technology suppliers, is a positive sign.

Government has earlier committed to an announcement in the current financial year, which ends on March 31 2014.

Provision has been made in government’s Integrated Resource Plan (IRP) for 9600MW of electricity generation capacity to be from nuclear by 2030. That is equal to the total capacity of Eskom’s Medupi and Kusile power stations.

The nuclear decision-making will be led by the National Nuclear Energy Executive Coordinating Committee (NNEECC) under the personal leadership of President Jacob Zuma.

Zeelie said a lead contractor could be appointed on an engineering, procurement and construction (EPC) basis, which might be the most appropriate contract format. If that is the case, other contractors will be working for the EPC contractor. On the other hand, Eskom might be the client, in which case it will structure the project like its Medupi project.

Eskom’s capacity to manage such big projects has been questioned widely and Medupi has seen delays, cost overruns, labour instability and quality issues.

Zeelie said it is further not clear whether one nuclear plant or a fleet will be announced initially.

He said the question is not whether a contractor will participate in this huge project, but where they will feature.

The project consists of two parts: the nuclear island, which requires more skills and a higher level of compliance and the other building works, which does not differ a lot from Medupi and Kusile.

Group Five, through its shareholding in Lesedi Nuclear Services has positioned itself with the required skills and compliance to work on the nuclear island. “I think we are the only local contractor who currently qualifies”, he said.

Early this year Group Five Nuclear Construction Services and Lesedi, in a consortium, won the contract for the design, manufacture and replacement of the 1 800 m³ refuelling water storage tanks (PTR Tanks) at Eskom’s Koeberg Nuclear Power Station. Working closely with original equipment manufacturer the French nuclear giant Areva, Group Five saw this contract as a huge step forward in its nuclear readiness.

Zeelie said while Group 5 worked closely with Areva in this instance, it has no exclusivity agreement with the French group. He said it is far from clear which of the international nuclear companies will lead the project. “It is too early to form close alliances.”

Zeelie said it takes at least seven years to build a nuclear power station.

During the construction peak construction, the workforce on a nuclear project might be equal to the 17 000 workers at Medupi, although a higher level of skills will be required, especially on the nuclear island, according to Junaid Allie Group 5 Human Resources director.

Mike Upton, CEO of Group 5, said if government’s infrastructure projects are rolled out at the same time, a skills shortage might develop. He said if needs be, an industry body like the South African Federation of Civil Engineering Contractors (Safcec) could be asked to facilitate an application for exemption from Competition Authorities to enable the industry to plan the best utilisation of resources.