Eskom’s Medupi Site Closed as Protest by Workers Turns Violent

Eskom Holdings SOC Ltd. today sent most of the 17,000 workers on the site where South Africa’s state-owned power utility is building the world’s fourth-biggest coal-fired plant home after a protest.

The demonstration by about 1,000 employees at the site of the 4,800-megawatt Medupi plant in Limpopo province turned violent, with stone-throwing and damage to two vehicles, Hilary Joffe, an Eskom spokeswoman, said in an e-mailed response to questions. “We are working to get back to normal operations as soon as possible,” she said. There were no reported injuries.

The cost of Medupi increased as much as 15 percent to 105 billion rand ($10.9 billion) and delivery of first power has been delayed by at least six months to the second half of 2014 because of contractors’ underperformance and labor disruptions, the utility said on July 8. Eskom is spending some $50 billion in the five years through 2017 revamping old plants and building new ones to avoid a repetition of January 2008 blackouts that halted mines.

Contractors aren’t paying workers for the extra time needed for their commutes as agreed, Steve Nhlapo, a sector coordinator for the National Union of Metalworkers, said by phone. Many employees have to travel for hours to and from Medupi, he said.

“The local guys are angry and fed up because of that problem,” Nhlapo said.

The site has been temporarily closed while labor issues are investigated, Ed Jardim, a spokesman for Murray & Roberts Holdings Ltd. (MUR), one of 300 contractors on the site, said in an e-mailed response to questions.

Employees of Alstom SA (ALO), a French power-equipment maker providing software for the site, aren’t involved in the protest, it said in an e-mailed statement.

“We evacuated the site as measure of safety and in the interest of our workers,” it said.

Members of Parliament’s portfolio committee on public enterprises are on an oversight visit to the Medupi plant today and tomorrow, the government said in an e-mailed statement yesterday.

To contact the reporters on this story: Paul Burkhardt in Johannesburg at pburkhardt@bloomberg.net; Tshepiso Mokhema in Johannesburg at tmokhema@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

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