KEY POINTS
- Eskom has settled a long-running Kusile contract dispute for R580m, far below the JV’s original R1.6bn claim.
- The agreement follows a Dispute Adjudication Board review and combines multiple claims and counterclaims into a final settlement.
- With Kusile’s last unit now operational, Eskom says the settlement clears one of its final legacy contract issues as it shifts focus to operational stability.
Eskom has drawn a line under one of its longest-running contractual disputes at the Kusile power station after securing a sharply reduced settlement with the Stefanutti Stocks Basil Read joint venture.
The agreement brings to a close a commercial standoff that has lingered since 2022 and weighed on the last phase of the coal plant’s construction in Mpumalanga.
The utility confirmed that the resolution followed the completion of a formal adjudication process for what was known internally as Claim 5, one of several complex contract matters tied to building works on the site.
The Dispute Adjudication Board’s review allowed both sides to restate their positions, test the contractual grounds of the claims and identify a path to closure that avoided a protracted battle.
Eskom Seeks Closure on Legacy Kusile Contracts as Final Unit Comes Online
Before the adjudication process began, the joint venture had placed its claim for Claim 5 at R1.6 billion, a figure Eskom has long regarded as inflated. The DAB later arrived at a recommended amount of R685 million, but further negotiations allowed the state utility to settle for R580 million.
The final number wraps together Claim 5, Claim 6 and Eskom’s own counterclaims against the contractors, giving both sides a comprehensive exit from a dispute that has dragged on for years.
Dan Marokane, Eskom’s chief executive, said on 25 November that the settlement formed part of wider efforts within the utility to defend its financial position while improving efficiency across major projects.
He added that the approach balanced cost, timing and risk, allowing Eskom to sidestep expensive litigation while safeguarding public funds. He also stressed that the settlement would not be recovered through electricity tariffs.
Eskom noted that settlements of this nature are common on multi-year engineering projects and cautioned against interpreting the agreement as any admission of liability or mismanagement.
With all six Kusile units now in commercial operation, the settlement clears away one of the last remaining legacy contract disputes tied to the plant, which has been under construction for more than a decade and has faced repeated delays and cost overruns.
The conclusion of the matter enables Eskom to concentrate on closing out contracts, optimising the station’s operations and improving reliability at a time when South Africa’s power system is under continuing strain.
Stefanutti Stocks, meanwhile, told shareholders that it expects Eskom to make the settlement payment by 12 December.
The construction group plans to channel at least 80 per cent of the proceeds toward reducing an R850 million loan provided by Standard Bank on 31 October, signalling its intention to strengthen its balance sheet following several difficult years across the industry.
