November 25, 2025

Eskom Resolves Kusile Contractor Dispute: R1 Billion Saved on SSBR Building Claims

Eskom has successfully resolved a three-year contractual dispute with the Stefanutti Stocks Basil Read Joint Venture (SSBR), settling a R1.6 billion claim for R580 million - a saving of just over R1 billion on building works at the now fully operational Kusile Power Station.

Settlement Details

The resolution follows the completion of a formal Dispute Adjudication Board (DAB) process for what was known as "claim 5" - a standard mechanism used to resolve contractual disagreements in large infrastructure projects. Through the settlement, Eskom will pay R580 million to SSBR, which is R105 million less than the DAB's recommended payment of R685 million.

This final settlement amount covers three components:

• The contentious "claim 5" which originally stood at R1.6 billion
• An additional "claim 6"
• Eskom's own counterclaim against SSBR

Importantly, Eskom has confirmed that this payment will not be recovered through electricity tariffs paid by consumers.

Context of the Dispute

The dispute dates back to 2022, involving the buildings contract at Kusile Power Station - South Africa's newest and largest coal-fired power plant. The Dispute Adjudication Board process allowed both parties to clarify their positions and identify appropriate contractual routes to resolve all outstanding claims.

According to Eskom Group Chief Executive Dan Marokane: "As Eskom drives multiple initiatives to increase efficiencies across the utility, the results demonstrate the extremely robust measures that have been put in place to defend Eskom and its balance sheet against contractor claims."

Significance for Kusile Power Station

The settlement comes shortly after Kusile reached full operational status, with Unit 6 - the final generating unit - achieving commercial operation on September 29, 2025. The resolution of this dispute represents the closing of one of the last remaining legacy contract matters at the power station.

Eskom emphasized that settlements of this nature are common in large multi-year infrastructure projects worldwide, and that the agreement does not constitute any admission of fault, liability, or mismanagement.

Outlook

With this dispute now resolved, Eskom can focus on contract close-out and operational optimization at Kusile. The fully operational status of all six units at Kusile (with a total capacity of approximately 4,800MW) has already contributed to the power utility's improved generation performance over the past year.

While this represents positive progress in clearing legacy issues, Eskom still faces challenges in other areas including municipal debt exceeding R90 billion and ongoing operational concerns. The utility has maintained that it remains committed to strong governance, disciplined contract management, and responsible stewardship of public funds.

Key Terms Explained

Dispute Adjudication Board (DAB): An independent panel that reviews and makes decisions on contractual disputes in large construction projects. Think of it as a specialized mini-court focused specifically on resolving construction disagreements before they reach formal litigation.

Stefanutti Stocks Basil Read Joint Venture (SSBR): A temporary business partnership between two construction companies (Stefanutti Stocks and Basil Read) formed specifically to undertake building works at Kusile Power Station.

Kusile Power Station: South Africa's newest and largest coal-fired power station with six generating units and a total capacity of approximately 4,800MW (enough to power roughly 3.1 million homes). The station has been under construction since 2007 and reached full operational status in September 2025.

Commercial operation: The stage when a power generation unit is fully tested, reliable, and officially added to the national grid as part of Eskom's regular generation capacity.