Johannesburg – Eskom has been left with an unfinished housing development in Mpumalanga after spending about R910 million on a project intended to accommodate workers building the Kusile Power Station.
According to Daily Investor, the Ogies Housing Project was planned to provide 366 flats for artisans, construction workers and technical contractors working on Kusile. The development was intended to reduce the cost of transporting workers to and from the power station.
However, the project was never completed and the flats have never been occupied. Eskom subsequently impaired the development by R918 million, after its original budget of about R160 million ballooned dramatically.
The scale of the failure had already emerged in 2021, when Sowetan reported that the development had cost Eskom about R840 million by 2019 before management decided to stop construction.
At the time, Siyakhula Vilakazi of the Auditor-General told Parliament’s Standing Committee on Public Accounts that the property had effectively been written off.
“That building has been impaired down to zero because where it is sitting now it’s very difficult to get tenants who would be willing to pay market-related rentals.”
Escalating costs
Vilakazi also said the property was not in a condition where people could live in it and that anyone taking it over could effectively require financial assistance from Eskom.
Eskom spokesperson Sikonathi Mantshantsha said in 2021 that the utility had been forced to spend additional money accommodating workers elsewhere because of delays.
“By 2019, Eskom had spent R840m on the flats and management decided not to continue with the building any more.”
Mantshantsha said the escalating costs were under investigation and that Eskom no longer needed the flats as construction at Kusile neared completion. The utility was then negotiating with the Department of Human Settlements over a possible sale for housing purposes.
The housing debacle forms part of the wider cost and project-management problems surrounding Kusile. Daily Investor reports that the power station, originally expected to be completed in 2017 at R121 billion, is now projected to cost R233.4 billion, with completion expected in 2028.
The abandoned development, therefore, represents not only money spent on a project that never delivered its intended purpose, but also additional costs Eskom incurred transporting and accommodating workers while the unfinished flats deteriorated.
Eskom has since attempted to dispose of the property, but the sale has not succeeded, with discussions continuing with Human Settlements over whether the development could ultimately be converted into social housing.
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Compiled by Betha Madhomu
