Constructing the Medupi Power Station
(12 pages of text)
Medupi was the first baseload project in South Africa in 20 years. It would be the largest dry-cooled, coal-fired power station in the world and was being developed by Eskom, which generated 90 per cent of Southern Africa’s power, at an estimated cost of R125 billion. In spite of the worldwide concern about greener energy, coal remained the most popular power station fuel for South Africa, due to the country’s vast resources of 224 million tonnes annually. The new capacity that Medupi would offer was sorely needed.
It had been challenging to follow a project schedule that involved various suppliers providing different packages at different dates and that required accommodating several interfaces during both design and implementation. Due to the massive scale and complexity of the project, three companies had joined forces to tackle the job, namely Murray & Roberts, Aveng, and Concor. Murray & Roberts had appointed Coenie Vermaak as project director at Medupi and, at 34, he was the youngest project director in the group. The managers of the joint venture had realized quickly that this would be “a project like no other.” The three companies’ different ways of working necessitated much more integrated coordination. For instance, employees from the different parent organizations had different job descriptions, remuneration, benefits, structures, processes, and cultures. Medupi’s uniqueness provided an opportunity to be pioneers in the construction industry and to “reconstruct construction.” A culture of employee engagement and alignment was required.
This case illustrates the impact that clear direction and focus, employee participation, and relentless performance management have on a large-scale construction project. The case explores a series of dilemmas in a project joint venture, where parent companies have different systems, processes, policies, and procedures. The drama of Medupi’s construction was played out against the background of South African high demand for thermal power and strained labour relations. Therefore, the challenges ahead revolved around how to accelerate the pace of construction and to improve alignment between the numerous contractors. The case could be helpful in courses such as organizational development, leadership, change management, transformation, organizational behaviour, organization performance, and human resources management.
South Africa, Large, 2011
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