Project profile
Augmentation of the existing Vaal River Eastern Subsystem (VRESS), which supplies water to the coal fields of eastern Mpumalanga, was necessary due to the expansion of Eskom and Sasol activities in that region.
Eskom’s thermal power stations and Sasol’s petrochemical installations are the strategic users of the water from the VRESS. The Vaal River Eastern Subsystem Augmentation Project (VRESAP), was commissioned specifically to transfer 160 million m3 of water between the Vaal Dam and Knoppiesfontein every year. Knoppiesfontein is where VRESAP delivers its water into the VRESS. The project consists of an abstraction works located at the Vaal Dam, including a low-lift pump station, a dualpurpose de-silting works-cum-balancing dams, a highlift pump station, 121 km of 1,9 m diameter pipeline, a 10 000 m3 surge tank and the upgrading of the existing diversion structure at Knoppiesfontein. VRESAP was declared operational in June 2009, using the temporary abstraction facility, thus allowing the commencement of the income stream on the project.
TCTA and the Contractor, the COVEC-MC Joint Venture have been in dispute in relation to the VRESAP contract and in particular in relation to the termination of the VRESAP contract. TCTA and the COVEC -MC Joint Venture have agreed an amicable resolution of all disputes between them and that the VRESAP contract should be deemed to have been terminated by mutual agreement between TCTA and the COVEC-MC Joint venture.
Funding
The project was funded on an off-government budget basis without an explicit government guarantee. Project costs will be recovered by 31 May 2029 from revenue generated by the sale of water to Eskom, Sasol and the Vaal River Eastern Subsystem users. The project also maintained its excellent long-term credit rating of AA+(zaf) by Fitch Ratings.
Engineering
In the early phases of implementing the project, the excavations of the permanent abstraction works revealed geological conditions which were different from those which were predicted. This necessitated amendments to the design of the abstraction works, the cofferdam and the construction contract.
A different completion date was subsequently set for the Permanent Abstraction Works, which was later than the completion date for the Balance of the Works. To minimise the delays in the delivery of water to Eskom and Sasol, TCTA awarded additional tenders to construct a temporary abstraction facility. The temporary abstraction works comprised a floating pump set where efficiency depended on the level of water in the Vaal Dam. Through this intervention, water from the project was delivered on 1 June 2009, thus declaring the project operational and allowing commencement of an income stream from the sale of water.
Socio-economic development objectives
TCTA created an excellent track record of local community empowerment. Where possible, employment and training opportunities were offered to communities along the pipeline route. The contract conditions stated that the principal contractors should recruit 45% of their total workforce from local communities, of which 75% should be historically disadvantaged individuals. Contractors are reporting regularly on conformance to these targets, and TCTA, together with the Project Engineer, monitors progress on a monthly basis. Contractors are also required to present reports prepared by a qualified auditor bi-annually. Adherence to these targets is assessed at the end of each contract. Failure to reach the set targets could imply levying penalties on the contractor(s) using an agreed formula under the terms of the contract.
Environmental
The affected communities, including farmers’ associations, local and national stakeholders, are represented on the VRESAP Environmental Monitoring Committee which meets quarterly to review environmental performance on site.
Key challenges
The major challenge encountered was a delay in completing the outstanding work on the permanent abstraction works, which related to the completion of the mechanical and electrical installations in the pump station, underwater excavation of the approach channel to the intake structure and removal of a cofferdam.
