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Did a certain company (name furnished) has renegotiated its contracts with Eskom with regard to its construction work at the Medupi Power Station

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Did a certain company (name furnished) has renegotiated its contracts with Eskom with regard to its construction work at the Medupi Power Station
27/07/2012

Question for written reply

Question no.: 2122

Date of publication: August 2012

Mr L W Greyling (ID) to ask the Minister of Public Enterprises:

(1) Whether a certain company (name furnished) has renegotiated its contracts with Eskom with regard to its construction work at the Medupi Power Station; if not, why not; if so, (a) what were the reasons for renegotiating the contract, (b) which clauses were renegotiated and (c) what new agreements have been reached; 

(2) Whether the negotiations affected the contract in financial terms; if not, why not; if so, how did the negotiations affect the value of the contract? NW2641E
Reply:
(1)(a-c)(2) According to Eskom, none of Medupi Project’s core contractual arrangements or the core terms of the contracts with any of the contractors, including the Medupi Power Station Joint Venture (MPS-JV) have been amended. Variations and claims have been dealt with in terms of the mechanisms provided for within the relevant contract.
As is the case with ordinary construction contracts of this complex nature, the contract includes mechanisms to address and resolve claims and variations. In this instance there were negotiations to resolve contractor claims and variations, relating amongst others to the scope of works and the section description of the works. The resolution of the contractor claims and variation have resulted in financial implications and the reformulation of certain relevant terms and conditions to assist the parties in mitigating the impact of cost and delay risks for the Project. This however, has not changed the overall business case and/or overall contractual risk profile for the Project.

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