18 years and R467 billion later — Most expensive mistakes in the history of Eskom

There is little reason to celebrate the eventual completion of Eskom’s newest power stations — Medupi and Kusile — which are both set to operate near their full capacity for the first time in 2025.

These two power stations serve as tangible examples of how poorly and inefficiently Eskom has been run, especially during the years of state capture where political interference in the utility’s leadership was the order of the day.

The two 4,800MW coal power plants were originally supposed to be completed more than a decade ago, but corruption, poor project management, and design defects severely delayed their commission timelines.

Had the construction of the stations run on schedule and entered full commercial operation by 2014, their capacity would have been sufficient for South Africa to completely avoid the past few years’ load-shedding.

The Medupi station was the first of the sibling plants to start construction in May 2007 and was originally supposed to be providing its full nameplate capacity by 2015.

However, only one of its six 800MW units was brought online in August of that year.

The station’s final unit — Unit 4 — came online in May 2021, six years later than planned.

At the end of July 2021, Eskom announced the plant had achieved commercial operation status.

However, the following month, a hydrogen explosion caused by human error severely damaged Unit 4.

Repairs on the unit were initially expected to take about two years but have also been delayed. It is now only slated to return to service by the end of April 2025.

Among the biggest issues that extended Medupi’s construction were multiple labour disputes, some of which turned violent and resulted in weeks of lost work and damaged equipment.

Design defects including steam piping pressure, weld rechecks on boilers, damaged mill crushers, and ash system blockages also contributed to the extended timeline.

The original budget for Medupi was R79 billion. By 2013, it had been revised to R154 billion.

As of 2019, independent estimates put the cost of the station at R234 billion when factoring in how the absence of some of its capacity has contributed to load-shedding and electricity revenue losses.

That cost excludes the fitment of the Flue Gas Desulphurisation (FGD) system already in place at Kusile, which will be required for Eskom to lower its emissions to meet environmental requirements.

According to an analysis of Medupi’s cost escalation by the African Development Bank, one of the plant’s funders, Medupi will not produce a positive financial return over its lifetime.

Kusile, which is located near Emalahleni (formerly Witbank) in Mpumalanga, began construction in August 2008, with an original estimated completion time of six years.

However, the first Kusile unit only entered commercial service in 2017, nearly a decade after the site’s ground-breaking.

By October 2022, three more units were in commercial service.

However, towards the end of that month, a section of the flue-gas desulphurisation (FGD) system connected to Units 1, 2, and 3 collapsed.

That resulted in all three units being taken offline for roughly a year before being brought back into service with temporary stacks thanks to a temporary emissions requirement exemption from the environmental affairs department.

One of the units has been transferred back to the repaired FGD.

Kusile Unit 5 and Unit 6 were synchronised to the grid in December 2023 and March 2025, respectively.

The station is expected to be fully commissioned in the second half of 2025.

Kusile was also impacted by violent labour disputes including offices and vehicles being set alight, and severe design defects.

Kusile was expected to be the second-largest coal power station in the world by its original completion date.

A sign outside the power plant mistakenly claims it is the second-largest power station of any kind in the world.

Eskom has also recently said that the plant will be the fourth-largest coal-fired power station in the world.

However, due to the delays in finalising Kusile’s construction, there are now at least five coal power stations boasting more capacity.

Kusile’s original budget was R81 billion, and its latest estimated cost, including the economic impact of its delays, stands at R233.4 billion.

Combined, the two power stations have cost an estimated R467 billion.

The delays and cost overruns on the power stations have directly impacted how much South Africans pay for electricity.

Eskom’s above-inflation increases only started in 2008, the year after construction of the two stations began.

Financing of the projects has contributed significantly to Eskom’s debt, which surged 10-fold from R40 billion in 2007 to over R400 billion in recent years.

The table below summarises the differences in the original budgets and completion dates of the Medupi and Kusile, potentially the two most expensive coal power stations ever built.