A South African engineer, Dr. David Milne, with three decades of project experience in South Africa and China, explains how South Africa can build its new nuclear power plants without the inevitable cost overruns or deadline delays.
According to Milne, creating a team of owners and appointing professional engineers within the team to oversee the project is vital to ensure the success of the country’s planned 2,500 MW core construction program.
From Dr. David Milne
There is a misconception in some circles that South Africa lacks the necessary technical expertise to successfully manage a nuclear project of this complexity and size. Corresponding engineering knowledge is and has been available in South Africa for many years and can be used in the implementation of this important project.
It would be essential for the successful implementation of the nuclear project to form a small owner team at the beginning of the project, which is staffed with professional engineers. This owner team would not take on the detailed execution of the project, but would have overall responsibility for its management. The composition of this team would include one professional person for each engineering and project management discipline.
The detailed execution of the project would be entrusted to a competent South African engineering, procurement, construction management (EPCM) contractor who would be appointed by the owner team and to whom it would report the status of the project on a monthly basis.
All contractors working at the Thyspunt project site, including the EPCM contractor, would be required to adhere to the strict project management requirements of the International Atomic Energy Agency (IAEA) and the International Project Management Institute (PMI).
Among other things, both agencies require each contractor to summarize and report their progress in a way that demonstrates that the project is on budget and on schedule. It would be the responsibility of the owners team to monitor compliance. The IAEA and PMI regulations would allow the owners team to determine the likelihood of a deviation from the project’s budget or schedule at an early project milestone.
This would make it possible to take corrective action while there is still time. Detecting unfavorable deviations at a late stage in the project inevitably leads to a fait accompli, as there is not enough time for corrective action.
Stay on budget
It used to be believed that accounting information could be relied on to predict the final cost of a project. This is a fallacy. For example, if the approved project budget is $ 100 million and the commitments (contracts and expenses so far) total $ 40 million, this does not mean that the final project cost would remain at the approved $ 100 million.
In order to determine the final project cost it is necessary to use engineering principles to determine the efficiency of the use of project funds by the EPCM contractor. Based on this efficiency factor, the final costs are then forecast if nothing changes and the contractor’s project business continues on the same path.
Reliance solely on accounting information ensures that costs are exceeded and this fact is usually only revealed late in the project life when there is little or nothing to correct the situation.
Likewise with the project schedule. Assuming that the sanctioned project duration is four years and that eighteen months have passed since the beginning, it cannot be assumed that the project will be completed in the remaining thirty months.
As with the analysis of project costs, the application of engineering principles is essential to determine the efficiency of the EPCM contractor’s time use. This efficiency factor is then used in turn to predict the final completion date should the contractor’s project business continue unchanged.
Likewise, reliance on a calendar ensures over-schedule, and this fact is usually revealed late in the project life when there is little or nothing to correct the situation.
Concern: money leaving the country using foreign skills
There is understandable public concern that the cost of the nuclear project is money being transferred overseas. That is not true. Although there will be offshore payments for the nuclear reactors, much of the budget would be spent on-site with existing South African companies.
These are issued in South Africa and distributed over the duration of the project, creating a boost for the national economy and, above all, for the local Eastern Cape economy. Such spending would kick-start and stimulate much-needed general economic progress.
Foreigners would be involved in certain critical nuclear reactor work, but most of the construction would be carried out by competent South African companies. Their activities would be coordinated and controlled by the EPCM overall contractor, who in turn would report to the owners team.
The project’s workforce would be predominantly South Africans. All building materials would be sourced from South Africa. So it is wrong to project an image that all the money for the nuclear project would flow out of the country.
The construction phase of the nuclear project would require many skilled craftsmen. Perhaps the most important manual skill required for Thyspunt would be the availability of coded welders.
Simply put, coded welders are highly qualified individuals who can read an engineering drawing and who have been tested and certified to work with the various ferrous and non-ferrous materials used on a construction site. However, many other manual skills are required.
In order to create the required number of craftsmen, the EPCM contractor would be tasked with recruiting suitable candidates from the local communities and training them under professional supervision in schools near the project site. These candidates would be guaranteed a job at Thyspunt after completing their studies. When the nuclear project was completed, these skilled artisans would be available to the South African economy.
Finally, the presence of employees at the Thyspunt site for several years should encourage the entrepreneurship in the local communities in creating numerous service industries to meet the needs of this dynamic large market.
South Africa has all the skills necessary to develop its nuclear power plant. We need the confidence now to start.
Now read the following:
What is the project management of SA’s new nuclear facility?
Dr. David Milne is a trained engineer and has been involved in leading major projects in the mining, process and industrial sectors in South Africa and China for over thirty years. He was a founding director and fellow of the Southern African Project Controls Institute and a member of Project Management SA and the American Association of Cost Engineers. He holds a PhD in chemical engineering from the University of the Witwatersrand.
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