Remarks by President Jacob Zuma on the occasion of visiting Medupi Power Plant for the Boiler Pressure Test of the First Unit of the Power Station, Lephalale, Limpopo

8 Jun 2012

Premier Cassel Mathale,
The Minister of Public Entreprises, Mr Malusi Gigaba,
Minister of Energy, Ms Dipuo Peters,
Eskom Board Members and Management
Medupi power station workers and management,
Ladies and gentlemen,

I am happy to visit Medupi today to share this important milestone.

Electricity sounds like a simple basic service but it is actually the lifeblood of the economy. That is why we are gathered here today, to demonstrate our joint interest in ensuring the continued supply of this scarce resource.

The Integrated Resource Plan of government forecasts that energy demand will be double the current levels by 2030. This requires that we increase the power generation capacity.

Government took a bold decision to build Medupi, and other big new power stations. These are Kusile in Mpumalanga and Ingula in KwaZulu-Natal, including the expansion of the transmission system.

Eskom is spending 340 billion rand on the projects, making this the largest infrastructure investment programme South Africa has ever undertaken.
 
The projects are progressing well. Kusile in Mpumalanga, is expected to cost 121 billion rand. The project is more than 17% complete with R 39 billion having been spent. The project has an estimated 25% impact on Delmas town’s GDP.

Ingula in Ladysmith is expected to cost 23 billion rand. The project is more than 42% complete with 11 billion rand having been spent. It is expected to have a 7% impact on the Ladysmith’s local GDP.

These projects demonstrate that our infrastructure plan will change the lives of our people in very practical terms.

Life is certainly changing for the better.

These new power stations will provide the electricity capacity needed to grow the economy, attract investment and create jobs.

The mega projects, that is, Medupi, Kusile and Ingula will create approximately 40 000 job opportunities, at 35 500 direct jobs during construction and operation and about 4 500 indirect jobs supporting the programme.

Medupi will be the fourth-largest coal plant and the largest dry-cooled power station in the world, with a planned operational life of 50 years.

We are excited about this project given its potential. Once all its six units are completed, Medupi will be able generate enough electricity to power almost the whole of Gauteng.

We are also encouraged by the impact of the project already in Lephalale. The area’s Gross Domestic Product is expected to increase by approximately 95% per year as a result of the construction activities.

Eskom currently has approximately 17 000 people working on the Medupi construction site. More than 40% are from the local area.

The construction of the Medupi Power Station will also have other positive spinoff for the local economy.

I am informed that together with its partners, Eskom has placed contracts to the tune of 700 million rand with Lephalale and Waterberg Districts-based suppliers since the commencement of the project. In addition, Eskom alone has a procurement expenditure of 202 million rand.

An estimated 70% of this expenditure will benefit Black women-owned enterprises in this region.

I was also happy to learnt that recently, Eskom donated three wellness clinics and medical equipments to the value of 3.8 million rand to seven local clinics and that since 2007, Eskom has invested the total value of 2.3 billion rand in infrastructure programmes within the Lephalale region.

This includes the construction of houses and upgrading of roads.

Homes and social infrastructure are being developed to serve the thousands of contractors working on site in this small but yet special community of Lephalale.

Lephalale will certainly never be the same again because of the Medupi power station.

Other than building the three new power stations, Eskom has already successfully returned-to-service the Camden Power Station in Mpumalanga, which was previously mothballed and is in the process of returning Grootvlei and Komati Power Stations both in Mpumalanga, to full operating capacity.

In total, by 2018, the capital expansion programme would have contributed more than 17000 megawatts of electricity and 4 700 km of transmission network.

We also expect a positive impact on skills development and the absorption of the youth into learnerships.

Medupi is expected to absorb a number of relevant university graduates such as those with engineering, project planning and also artisans. In that way, it will contribute to growing South Africa’s supply of engineers, artisans, and project management experts.

Ladies and gentlemen,

While the build projects are proceeding well, we must remember that it takes a long time to build new power stations such as Medupi and Kusile.

Currently, the demand for electricity is increasing as our economy grows and more of our people gain access to electricity.  We must therefore to save electricity.

Eskom cannot keep the lights on alone.

We must play our part and switch off appliances and lights that we are not using. Working together we can make a difference.

Ladies and gentlemen,

I am happy to have experienced the boiler pressure test and am delighted at the progress being made with this project and the impact it is having on the community.

I congratulate the Ministers, Eskom and all our workers for a job well done thus far.

I thank you.