The Premier of Limpopo, Mr Stan Mathabatha,
Public Enterprises Minister, Ms Lynne Brown,
Energy Minister, Ms Joemat Pettersson
Economic Development Minister, Mr Ebrahim Patel
Public Works Minister, Mr Thulas Nxesi
Waterberg Executive Mayor, Councillor. Rosina Mogotlane
Lephalale Local Municipality Mayor, Councillor. Jack Maeko
Interim Eskom Chairman, Mr Ben Ngubane and all board members,
Interim Eskom Chief Executive, Mr Brian Molefe and the management team,
Dikgoshi tsa rona, Kgosi Seleka, Kgoshi Langa and Kgosi Shongoane
The Community of Lephalale,

Fellow South Africans, I greet you all.

Today we open an important and exciting chapter in our country’s energy history. Our country has experienced serious energy challenges in recent times. The shortage of energy does not only cause enormous inconvenience to our people. It is a serious impediment to economic growth. The difficult economic global conditions and our energy shortage are a serious challenge for the South African economy.

Today we are gathered to say to our people, there is light at the end of the tunnel. In 2005 Eskom was given a huge mandate to construct power stations to meet the country’s energy demands. Work began to build the power stations - Medupi in Limpopo, Kusile in Mpumalanga and Ingula in KwaZulu Natal. All are at various stages of development. 

The Medupi Power Station, whose construction started in May 2007, is the largest coal-fired power station in our country. It will also become the world’s largest dry-cooled coal-fired power station. This is also the first baseload station to be built in 20 years by Eskom, after Majuba Power Station. 

We have waited very long for this day, to begin seeing some energy coming out of this station! And today we are gathered to celebrate the official opening of Medupi Unit 6 phase. The beginning of the commercial operation of Unit 6 has demonstrated that this project is making progress. Unit 6 adds seven hundred and ninety four (794) megawatts to the national grid. In this regard, its impact is already being felt countrywide.

Pressure is being alleviated on the national electricity system to prevent or minimise load shedding. This is a very important milestone in Eskom’s growth trajectory towards the 4800 megawatt capacity that must be achieved at the completion of the other five units. The Medupi project is a living example of the pervasive impact and potential of our infrastructure projects with regard to stimulating the local economies, as it is the case here in Lephalale.

The construction of this site jerked the economy of this area very significantly, in terms of job creation mainly, infrastructure development and social investment. The town of Lephalale’s GDP for example, has increased by about 95% per year as a result of the constructions.

At the peak of the construction, about eighteen thousand construction employees and two thousand supporting staff were employed here, sourced mostly from the local areas, thus contributing to the improvement of local skills. There are currently more than thirteen thousand employees on site at Medupi, while Kusile has fourteen thousand.

In all these projects, South African companies were prioritised for procurement and obtained 62% of the R75 billion of the contracts for the new built programme. Other added benefits of the Medupi project included skills development, which was part of the contractual obligations, targeting skills such as boiler making, coded welding, engineering.

So far two thousand five hundred and thirteen (2 513) candidates have completed their training, and the majority of those are working within the project. About 90% of the candidates at this facility come from within Limpopo province. In addition, since 2011, a total of 74 emerging contractors and suppliers have successfully completed the Eskom Contractor Academy, a registered programme offered in partnership with the University of Limpopo.

Eskom has also spent about six million rand on the training of business owners to benefit their businesses and the community. A total of 28 other local business owners and agricultural co-operatives were trained, mentored and coached. The project is also making an impact in career guidance.

To date, approximately seven thousand and forty eight (7 048) learners and students have received an opportunity to visit the Medupi project, as part of their school outreach programmes or university students’ exposure to megaprojects like this one.

Fellow South Africans and friends,

Apart from job creation and skills development, the Medupi project boasts other infrastructure spinoffs. Since its inception, the project has invested in excess of R2.3 billion in infrastructure as well as socio-economic development initiatives in Lephalale. One hundred and thirteen point six million rand (R113.6 million) has been invested in building the D1675 provincial road as the diversion road from site. One hundred and ninety million rand (R190 million) was spent on the construction of the Kuipersbult Road and the expansion of Nelson Mandela Road. 

Eskom has also established a Medupi Information Centre in Lephalale, which disseminates project information to various stakeholders and offers registration by locals for job opportunities, logging of issues, as well as vendor registration. This is important because we encourage the dissemination of information to the public by all government entities.

The Lephalale town infrastructure also benefited from a R10 million upgrade of electricity infrastructure through the supply and installation of transformers to deal with the short-term capacity constraint in the town. In addition, 31 million rand was invested in sewage plants in adjacent places such as Marapong. 

With regard to human settlements, Eskom built 995 houses and bought 321 flats at a cost of R1 billion in the Lephalale area. In addition, various contractors’ villages with the capacity to house six thousand seven hundred and fifteen (6715) employees were set up at a cost of 950 million rand.

This not only boosted the housing market in the area drastically, but also makes a serious contribution in addressing the apartheid legacy of lack of decent housing around the employment areas, particularly acute in the mining areas. Various Eskom initiatives also benefit health facilities such as clinics in the various villages in the area. Our traditional leaders here can also attest to that. As part of Operation Phakisa, we launched the Ideal Clinic initiative recently.

In its unique way, Eskom advances our aspiration of an ideal clinic by investing in excess of 8.6 million rand in a mobile unit for primary school health care, which included eye testing and provision of spectacles, general health, and dental care. This service reaches children in primary schools around Medupi Power Station Project in Seleka, Mokuruanyane, Shongoane, and Marapong.  

I am also happy to add that an amount of 3.5 million rand has been injected into the refurbishment and upgrading of the Seleka Community Hall and Traditional Offices. SAPS facilities in Lephalale were also refurbished, including mobile homes, all to the tune of more than 3 million rand. Through various contractors in this project, enormous contribution has been made towards education.

They have supported mobile classrooms, equipment, payment of some teachers, school development training, schools renovations, as well as financial injections towards particularly early childhood development centres. Eskom also supports various youth and community development forums, and makes interventions in the agricultural field as well and dispensed disaster relief during the floods in the area.

Ladies and gentlemen

It is important to also emphasize that despite the bustle of activity in this area, the Medupe project adhered to the highest standards of environmental probity as possible, starting with their location, where there is low environmental impact on the chosen site.

The fact that great care was taken to preserve and protect the natural environment of this area, particularly plants and animals, is an exemplary case of development that takes due cognisance of the natural environment, showing that one should not really be inimical to another.

Also commendable is the investment through the Environmental Monitoring Committee in environmental education to the local people and employees. The people have been taught about chemical hazards and the prudent use of resources.

Eskom is also open to independent scrutiny by the Department of Environmental Affairs Environmental Management Inspectors, known as the “Green Scorpions”, to ensure environmental compliance.

Compatriots and friends,

Today’s launch of the Unit 6 phase makes it clear that Medupi has been a catalyst of development in this area in a relatively short period. Medupi’s megawatt contribution, along with the 1 800 megawatts that is supplied by independent power producers, will further strengthen the country’s electricity supply and stimulate our economy. This will help achieve the projection made with regard to Medupi, that at its completion, it will directly grow South Africa’s GDP by approximately 0.35% per year. 

The coming onto stream of Unit 6 takes place at a most opportune moment for our country, during a difficult global and domestic economic climate. The GDP growth has contracted by 1.3 per cent in the second quarter of 2015 after growing by 1.3 per cent in the first quarter of 2015. Growth contracted in all sectors except for personal services and general government services.

Challenges in the energy sector, drought conditions and weak domestic demand all contributed to the contraction in the GDP growth in the second quarter. The energy shortage is a serious obstacle to growth. In this regard, the opening of Unit 6 is a significant achievement for the country. We are pleased that Eskom now fully appreciates the need to move with speed to ensure that there are no further delays at Medupi.

We are continuing to implement measures that will remove all binding constraints in the economy. Our major intervention is the Nine Point Plan that was announced in the State of the Nation Address this year. I provided an update recently to the nation on the implementation of the plan, which is informed by the National Development Plan. The plan is aimed at removing constraints and to boost business and consumer confidence, investment and economic growth.

The Plan comprises the following;  

a)  Revitalisation of the agriculture and the agro-processing value-chain;
b)  Advancing beneficiation (adding value to our mineral wealth); 
c)  More effective implementation of a higher impact Industrial Policy Action Plan;
d)  Unlocking the potential of SMME, co-operatives, township and rural enterprise; 
e)  Resolving the energy challenge;
f)  Stabilising the labour market;
g)  Increasing private-sector investment;
h)  Growing the Ocean Economy;
i)  Cross-cutting Areas to Reform, Boost and Diversify the Economy which are the following;
  &nbsnbsp; i.    Science, technology and innovation
    ii.   Water and sanitation
    iii.  Transport infrastructure
    iv.  Broadband rollout 
    v.   State owned companies. 
 

We urge business and labour as well as the community sector to continue working with us in the implementation of this Plan.

Ladies and gentlemen,

It has been a long wait since my last visit here in June 2012. It is my pleasure to now finally, officially open the Unit 6 phase of the Medupi power station!

Working together, we will move South Africa forward!

I thank you

Issued by: The Presidency
Pretoria