The Western Cape High Court has ordered Eskom to pay close to R1 billion to French nuclear contractor Framatome, following a cancelled contract related to the Koeberg nuclear power station in the Western Cape.
The dispute stems from a 2014 agreement initially signed with French firm Areva, which was later transferred to Framatome. The contract involved the design, manufacture, and installation of six replacement steam generators, with three allocated to each of Koeberg’s reactor units.
Framatome, a company with over 60 years of experience in the nuclear industry, was contracted to complete the installations during planned maintenance outages at both units. However, the maintenance schedules were repeatedly postponed.
Eventually, two months after a date was finally set, Eskom informed Framatome it would no longer proceed with the replacement project.
The court found that Eskom’s own project manager had acknowledged the decision to cancel the work constituted a compensation event under the contract.
However, he later concluded that no compensation was payable. This led to arbitration, where the adjudicator ruled that Eskom was liable for various costs, including the storage of equipment and other implementation activities that were disrupted due to the delays.
After Eskom refused to engage further in the arbitration process or provide additional documentation, the adjudicator finalised the damages amount. Eskom then approached the High Court to challenge the decision, arguing that the determination was invalid due to timing issues.
The court rejected Eskom’s arguments, stating that there was no reason to set aside the adjudicator’s decisions, which were found to be valid and binding. It ruled that Eskom had failed to meet its contractual obligations and confirmed that Framatome was entitled to the full amount claimed.
In addition to nearly R1 billion in damages, Eskom was also ordered to pay interest and legal costs.
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