4July 2013

South Africa is a thriving building site, with about 1 132 active construction sites creating employment for about 178 000 people on projects monitored by the Presidential Infrastructure Co-ordinating Commission (PICC).

The commission held a meeting (...), where progress on these projects - with a value of R750-billion - and other infrastructure development matters were thrashed out.

Speaking to reporters after the meeting, President Jacob Zuma said he was happy with the development progress of the country.

"The meeting took longer because of the volume of the matters on the agenda, such as the progress report on infrastructure build. We had lots of discussions and we are certain that we are making progress," he said.

The PICC brings together representatives of the three spheres of government, Cabinet ministers, premiers, metro mayors and the South African Local Government Association representatives to harmonise developments in the National Infrastructure Plan.

The meeting examined the successes and challenges in the roll-out of the 18 Strategic Integrated Projects (Sips), which currently make up the country's multi- billion rand National Infrastructure Plan.

'National, collective point of view'

The plan looks to transform the economic landscape, while simultaneously creating a significant number of new jobs and straightening service delivery.

The Sips cover various projects of economic and social infrastructure projects such as schools, hospitals and new power stations.

"The important thing about the [PICC] is that it puts together all tiers of government to discuss issues from a national, collective point of view," said Zuma.

Economic Development Minister Ebrahim Patel - chair of the PICC - said the commission currently tracks almost half of the state's capital spending and the whole of government infrastructure spending.

Patel said during the term of the current administration, which ends next year, the country was on course to reach spending of R1-trillion on infrastructure projects.

He also said the state was spending about twice as much on infrastructure now than it did five years ago and attributed the increase in infrastructure expenditure to projects such as the 2010 FIFA World Cup and associated projects.

New building technologies and innovative building, which could reduce construction costs, are being evaluated by the government, he said. The increase in infrastructure spending was also due to construction cartels which have pushed up the cost of building, Patel said.

The PICC meeting discussed the investigation showing evidence of pervasive price fixing, collusion and corruption in the private construction industry, following the Competition Commission reaching a settlement with 15 construction firms, who agreed to pay fines to the tune of R1.46-billion for collusive tendering on 24 June. Rural Development and Land Reform Minister Gugile Nkwinti said the infrastructure build gave government a stronger grip on developing the economy.

Source:SANews.gov.za

Read more:http://www.southafrica.info/business/economy/infrastructure/construction-040713.htm#.UdWDZzusg6Y#ixzz2Y5PU3X2t

The basic design work for Eskom’s 100 MW concentrating solar power (CSP) demonstration project, earmarked for development in the Northern Cape town of Upington, is nearing completion and the prequalification of potential contractors should begin within months.

Proposed is the development of a central-receiver CSP plant, where molten salt is used as a storage and heat-transfer medium. The so-called power tower will be surrounded by an array for heliostats, or mirrors, which continuously reflect sunlight on to the tower’s central receiver.

Tractebel Engineering has been appointed the owner’s engineer on what has been provisionally set down as a R9-billion project, with a more precise capital estimate to emerge only once a tender process has been concluded.

Eskom group executive for sustainability Dr Steve Lennon tells Engineering News Online that a two-stage bidding process is envisaged, with the first request for unpriced technical proposals likely to be launched in the second half of 2013.

The tender seeking price bids is expected to close during 2014 and the engineering, procurement and construction (EPC) contractor should be appointed in the second half of next year. A three-year construction phase is anticipated to follow, beginning at the end of 2014 and continuing through to the end of 2017. The commissioning phase is likely to continue into the first half of 2018.

An oversized site has been secured in anticipation of Eskom pursuing a 500 MW to 1 000 MW fleet of solar projects in the coming years. In addition, a new substation will be developed in Upington to service both the Eskom CSP plant, as well as solar facilities being built in the area by independent power producers (IPPs).

Sun-drenched Upington has also been identified as a key location in the eventual realisation of the Department of Energy’s larger solar park, or corridor, concept, which is currently being investigated by the Central Energy Fund (CEF).

In fact, the CEF has issued a new request for proposals for the appointment of a feasibility study consultant for a 1 000 MW solar park on a site in the //Khara Hais municipality, which governs the town of Upington.

Spain’s Abengoa has already started construction on two CSP projects, including the 50 MW Khi Solar One power-tower CSP project, near Upington. The group is also developing a 100 MW parabolic trough CSP plant, dubbed KaXu Solar One, near Pofadder, also in the Northern Cape province.

Lennon reports that environmental authorisations, including the water licence, have been secured along with part of the funding for what Eskom still considers to be a research and development (R&D) programme. To date, about 50% of the funding has been secured through development financial institutions (DFIs) such as the African Development Bank, the Clean Technology Fund, Agence Française de Développement, German development bank KfW, and the World Bank, which is acting as funding coordinator. “We don’t anticipate that it will be a problem securing the balance of the funding,” Lennon says.

However, he acknowledges that all Eskom R&D and capital projects are currently the subject of a review designed to recalibrate the utility’s expenditure profile with the stipulations of the National Energy Regulator of South Africa (Nersa).

On February 28, Nersa granted Eskom yearly increases of 8% for the period from 2013/14 to 2017/18, instead of the 16% it had requested. This translated into allowable revenue for the period of R862-billion, rather than the nearly R1.1-trillion sought.

The R&D review forms part of a larger ‘integrated delivery programme’, designed to close the R225-billion financial gap arising from the lower-than-requested tariff determination.

“In the short term, we need to take out some major operating costs, with the real bite on the capital programmes to come in two years time. But decisions need to be made; probably in the coming six months.”

Lennon believes there is still capacity to draw in additional DFI finance and reports that other commercial sources are being considered. “The project will have to be fully funded at the point when contracts were placed,” he stresses.

Eskom has not yet calculated the CSP demonstration plant’s likely production costs. These are likely to be relatively high, owing, Eskom says, to the integration on a number of innovations, such as dry cooling and a capacity factor of above 60%. “This is a demonstration plant. This is not being set up, initially, as a commercial plant.”

Hybridisation has also been considered, but has been shelved for the time being in a bid to simplify the already “complex” design, as well as the lack of available gas in the area.

Localisation is also on the agenda, with any material industrialisation spin-offs likely to flow only if IPPs and Eskom pursue future CSP projects, based on the power-tower concept. For the initial project, the civil engineering package will be localised, while Eskom is keen to source the heat exchanges, the structures that hold the heliostats, and possibly even the heliostats themselves, domestically.

Between 1 000 and 1 500 construction jobs are likely to be created, with 70 permanent employees required to operate the facility.

From: Engineering News, edited by Creamer Media Reporter

A large majority of respondents viewed South Africa as the most attractive African country in which to do business, with 41% of all respondents putting South Africa in first place and 61% including the country in their top three.

South Africa, rated the most attractive country in Africa for investors, itself invested in more projects in the rest of the continent than any other country in 2012, according to Ernst & Young's third Africa Attractiveness Survey.

The report combines an analysis of international investment into Africa over the past five years with a 2013 survey of over 500 global business leaders about their views on the potential of the African market.

"The primary reasons for South Africa's popularity appear to be its relatively well-developed infrastructure, a stable political environment and a relatively large domestic market," Ernst & Young said in a statement.

Hot on South Africa's heels were Morocco (20% of respondents placing it in the top three, 8% putting it first), Nigeria (20% top three, 6% first place), Egypt (15% top three, 5% first place) and Kenya (15% top three, 4% first place).

South Africa’s rolling renewable-energy procurement programme has gained further momentum with another 19 projects reaching financial close on May 9 and with the tender documentation for the third bid window having also been released into the market.

The second bid-window projects – identified as preferred bids in May last year under South Africa's increasingly acclaimed Renewable Energy Independent Power Producer Procurement Programme – comprise wind, solar and mini-hydro projects collectively representing 1 044 MW of capacity.

In fact, there are nine solar photovoltaic (PV) projects with a combined allocation of 417.1 MW, seven wind projects selected, representing 562.6 MW, two small hydropower projects of 14.3 MW each and one 50 MW concentrated solar project (CSP).

The average prices offered by the solar PV developers in the second round fell from 275c/kWh to 165c/kWh, while wind prices fell from 114c/kWh to 89c/kWh and CSP prices fell slightly from 268c/kWh to 251c/kWh.

Collectively the projects should result in capital investments of more that R28-billion and will include participants from North America, Europe and Asia.

With the second bid-window close there are currently 47 renewable-energy projects being implemented in South Africa, with the 28 first-window solar and wind projects, collectively representing 1 416 MW, all well into their construction phases. These projects will attract collective direct investments of around R47-billion.

HIGHER THRESHOLDS

The request for proposals (RFP) documentation for the third bid window has also been released and Energy Minister Dipuo Peters indicates that while local content and economic development thresholds have been increased, process lessons from the first two rounds have also been incorporated in a bid to ensure that there are no further delays to bid submission and financial closure deadlines.

August 19 has been set as the third bid-window-submission deadline, with preferred bidders to be named by October 29. Under the current schedule, power purchase, connection, direct and implementation agreements should be finalised on July 30, 2014.

The technology allocations and the new price caps were not immediately available, but it is understood that the onshore wind allocation will be around 653 MW, followed by solar PV with 401 MW, with 60 MW allocated to small hydropower, 25 MW to landfill and 12.5 MW each for biogas and biomass. It is understood that CSP will also feature, but a forecast for the allocations has not yet been provided.

Department of Energy (DoE) deputy director-general Ompi Aphane says the allocation will draw from the remaining 1 1 65 MW allocated under the first determination, which stated that 3 725 MW of renewables capacity would be procured. However, it could be supplemented by the more recent December determination, which set aside a further 3 200 MW for procurment by the South African government.

He also indicates that a RFP for small-scale projects of less than 5 MW will be released in the coming months, with the documentation nearly finalised.

The aim is to continue with a number of renewables procurement rounds and for South Africa to procure about 1 000 MW yearly over a sustained period. However, this target could be adjusted once the new Integrated Resource Plan (IRP) for electricity is published later this year.

DoE director-general Nelisiwe Magubane says that the intention is to first finalise the Integrated Energy Plan (IEP) as a road map for electricity and liquid fuels and the align the new IRP to that blueprint.

The IEP document will probably be presented to Cabinet before the end of May, whereafter the DoE will undertake “extensive” stakeholder consultation on the plan.

The new IRP will follow and should be completed before the end of the year.

Engineering News

Edited by: Creamer Media Reporter