The Medupi power station under construction in Limpopo.
The Medupi power station

THE chances of the R91bn Medupi power station feeding power into South Africa's overstretched grid by the end of this year are looking slimmer as little work has been done since January 16. Every day pumps up cost overruns.

On Friday, 46 workers were arrested at the site after long work stoppages turned violent in the township of Maropong in Lephalale, Limpopo.

Hilary Joffe, Eskom spokeswoman, said Eskom vehicles and a clinic were set ablaze.

While timelines for bringing the plant into operation have not been revised, Ms Joffe said the labour unrest and violence are threatening delivery.

Work stopped at the 4,800MW power plant on January 16 after workers accused management of the construction companies of not paying out December bonuses in full. Joffe said while Eskom is not the employer at the plant (Eskom employs the construction companies who in turn employ the workers), it is understood that independent auditors have been brought in to scrutinise the payment issues.

It is unclear if contracted companies will be charged penalties for late delivery of the plant. Ms Joffe said Eskom's priority is to restore normal site operations and ensure the safety of all workers. Once the site is operational, the issue will be explored.

Numsa's sector co-ordinator Stephen Nhlapho said although there is anger over bonus payments the union's major grievance is about the project labour agreement (PLA), which managements of construction companies are refusing to amend.

Mr Nhlapho said all parties signed the PLA in 2004 so project organisation could go ahead. But the labour force has changed and most workers on the site are now skilled and semi-skilled artisans for whom the agreement is no longer relevant. Management is hampering efforts to renegotiate terms.

Mr Nhlapho also said the current PLA does not allow for the right to strike or the right to collective bargaining so grievances cannot be dealt with effectively as there are no structures to follow.

Mr Nhlapho said construction management and Numsa went to court and it ruled in Numsa's favour.

But construction companies are appealing. Once new agreements are in place, grievances will be addressed and protests will stop.

Grievances the current PLA does not allow to be raised and addressed include food and accommodation. Mr Nhlapho said these cause unhappiness among workers.

Rotten food provided by Murray & Roberts was raised last April and May. The group cancelled its contract with caterers, agreeing that food was substandard. But Nhlapho said the issue has not gone away. He alleges the current caterers are based in Middelburg in Mpumalanga and the food is transported 345km daily to Lephalale. This costs jobs in the local community and food is often spoiled when it arrives.

Murray & Roberts group communications executive Ed Jardim said this issue was site specific and would not comment.

Mr Nhlapho said almost no new accommodation was built for workers and money was poured into renting homes of thousands of local residents, who set them up as guesthouses.

Exorbitant rent - up to R15,000 a month - has been spent on renting shipping containers that sleep two.

Workers who cannot not stay on site spend up to seven hours a day travelling to and from work on badly potholed roads, he said.

Thai workers have been imported to do specialist welding for Hitachi, which is supplying and installing boilers. This has been a source of resentment and the company confirmed that security had to be brought in to ensure the safety of these temporary workers.

In 2011 Eskom announced that Medupi, which was expected to deliver power late in 2012, would only do so in the second half of 2013.

Poor performance by contractors was cited as the reason then. The plant was expected to be fully operational by 2015 but workers downing tools in September last year might see further delays.

* This article was first published in Sunday Times: Business Times