Medupi Power Station: Why did it cost so much?

 Medupi Power Station: Why did it cost so much?

Medupi Power Station: Why did it cost so much?.

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Overview

Medupi Power Station is a dry-cooled coal-fired power station based in Lephalale in Limpopo which was initialised in 2007 and had an estimated cost of R32 billion, with the design changed later during the year, pushing the design up to an output of 4,764 MW.

After a series of problems with design flaws, delays, load shedding, and several cost implications that have littered the road to completion of the Medupi power station, it has finally been completed. South Africa has faced many issues regarding rolling blackouts due to problems faced with the generation of electricity. There is also the issue that South Africans are now paying four times more for electricity than they would have ten years ago, because of finance stealing, cost overruns, and tariff increases caused by these overruns.

Costs involved with Medupi Power Station

Six years after the first Medupi unit started providing power to the South African grid, the sixth and last generating unit for the power station has finally achieved commercial operation. Medupi is now the fourth-largest coal-fired plant as well as the largest dry-cooled power station in the world. The power station has seen cost overruns and significant design issues which have resulted in many delays in the projects.

There were also several breakdowns on units which were major contributors to the recent spate of load shedding in South Africa.

The initial expected cost was R80 billion in 2007 which changed to R154 billion in 2013 and revised again in 2019 to R234 billion. Some of the primary reasons for cost escalations involve the importing of components, affected by the fluctuating exchange rate between the South African rand and other currencies. There were also many issues with design changes and labour disputes which resulted in standing time.

Liezel Thorne

Liezel is a content writer with a passion for writing about the financial industry and corresponding markets. Her favorite topics include Forex, Stocks and Indices, Cryptocurrencies, and anything relating to trading technology – news, newest and latest tips, tricks, and trends. She has done extensive reviews on brokers, trading platforms (web, desktop, and mobile), and various other concepts involved with trading. As a student of Environmental management, she has a keen interest in geography, environmentalism as well as conservation of both fauna and flora.

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