Delays and disruption at Medupi Power Station, South Africa
A large international South African civils contractor (a joint venture of three South African contractors), constructing a coal powered power station in South Africa.
In 2008 the contractor was awarded a contract for the main civils works. The contract value was approximately $281.5M.
The works comprised of six separate generation units making the project the fourth largest coal fired power station in the world.
The contract period within which the contract required the joint venture to construct the works was 51 months.
From the outset the execution of the works were delayed and disrupted by a large number of differing factors.
These ranged from incomplete and evolving design to nationwide industrial unrest. The effects of these events (and others) that led to inefficient working.
The employer, wishing to mitigate and reduce the effects of the delays needed the contractor to accelerate the execution of the works.
These matters caused a substantial increase in both direct and indirect costs that the joint venture sought to recover under the contract.
Tungsten Capital was initially engaged to advise on the evaluation of the acceleration.
Later, we were asked to produce prolongation and disruption claims for the air cooled condenser and turbine hall Unit 6 of the project.
Later still, the scope of work was increased to include all units of the boiler house, auxiliary bay and the remainder of turbine hall.
At the date of appointment the project had run for almost three years. This meant that the volume of records to be digested and understood was enormous and in many cases un-collated.
Furthermore, the content of many were of questionable quality. The main challenge we faced was, within the time made available for our work, to gather, understand and process all records pertinent to the issues addressed within the claims.
This task was made more challenging as one audience for our work was the dispute adjudication board identified within the contract.
Tungsten Capital Actions
Tungsten Capital mobilised resources to work in two teams.
One team worked on site gathering and processing information, interviewing members of the joint venture site management.
At various stages meetings were held with the engineer to discuss the issues and open the way for high level negotiations to achieve settlement.
A second team, based in UK, was tasked with writing the narratives and undertaking forensic planning.
The task of preparing the QUANTUM was shared between our staff in UK and South Africa.
In May 2012 the joint venture reached a negotiated settlement with the employer for all claims up to the end of March 2012.