Court slaps Eskom with R1bn bill for Koeberg delays

News24

5 days ago

Eskom has been ordered to pay around R1 billion to French nuclear reactor company Framatome over delays in the replacement of Koeberg's steam generators.
The Western Cape High Court agreed with the findings of an adjudicator who investigated the delays two and a half years ago, ruling that Eskom was at fault for the work stoppage and had to pay for breaching its contract.
'There is no basis to set aside the decisions of the adjudicator which are valid and binding,' said acting Judge RT Williams.
He ordered the power utility to pay Framatome €35 288 582 (about R728 million at current exchange rates) plus R256.6 million, for a total of R984.6 million. Eskom will likely have to pay well over R1 billion when it factors in interest and Framatome's legal fees.
The dispute centres on the replacement of steam generators at Koeberg, South Africa's sole nuclear power station. Framatome had, in 2018, taken over the contract to supply and install replacement generators at the power plant's two reactor buildings from Areva NP.
Eskom needed to replace the plant's six steam generators - three in each of its two units - to prolong its life by another 20 years.
Eskom scheduled an outage for Koeberg's Unit 2 starting in January 2022 to replace its generators. But in March, it told Framatome it would not be continuing with the steam generator replacement and ordered it to stop work.
Framatome told Eskom that the order to stop work amounted to a 'compensation event' under its contract – meaning it could claim for the disruption. Eskom's project manager agreed, but gave the compensation as nil – meaning Framatome would not be able to claw anything back.
The nuclear company then referred the matter to an adjudicator as provided for in its contract with Eskom.
READ | Eskom scrambles to save R5bn Koeberg project after generator is 'dropped' in China
The adjudicator, advocate Peter Ramsden, had to rule whether the event did, indeed, amount to a compensation event. He had to say what, if anything, Eskom owed Framatome for the abrupt stoppage.
On 15 December 2022, Ramsden ruled the work stoppage order was a compensation event. In March 2023 – a year after Eskom told Framatome to stop work – he fixed what Eskom owed at €35.2 million plus R256.6 million and interest.
Eskom then took the order to court. It argued that adjudicator had taken too long to make a decision, that he had overstepped his authority, that this authority had lapsed, and that he had failed to give detailed reasons for his decision.
Framatome, meanwhile, supported Ramsden's decision.
In a ruling handed down last week, Williams dismissed every one of Eskom's objections, saying Ramsden had done nothing wrong.
'Eskom's challenge to the reasons provided by the adjudicator is clearly a distortion of the quantum decision and a stratagem to avoid having to comply with the adjudicator's decision,' he found.
The steam generators in Unit 2 were eventually replaced during a long‑term outage that began in December 2023. The unit was synchronised to the grid again in December last year.