March 26, 2015 / 7:30 AM / 5 years ago

REFILE-UPDATE 2-South Africa's Eskom halts work at strike-hit power station

(Refiles to fix first paragraph)

* Workers damaged property at Medupi in Wednesday strike

* Power plant has been delayed by labour disputes

By Peroshni Govender and Wendell Roelf

JOHANNESBURG, March 26 (Reuters) - South Africa’s Eskom said striking workers had destroyed property at the Medupi power plant it is building and the state-owned utility closed the site on Thursday to assess the damage.

Labour disruption and technical faults have increased costs at the long-delayed Medupi coal plant, expected to start generating 800 megawatts of extra electricity by July. It would become South Africa’s first new power station to come online in 20 years and help to address a chronic supply shortage.

About 21,000 contract workers went on a one-day strike on Wednesday over poor living conditions and seeking higher pay.

“During the strike, some of our buildings and vehicles were damaged. We have closed the site in order to determine the extent of the damage,” Eskom spokesman Khulu Phasiwe told Reuters.

“Any day of delays will unfortunately result in bigger delays and if the action continues beyond tomorrow, we will have a problem,” Phasiwe said.

The National Union of Metalworkers of South Africa said it was prepared to go to court to compel Eskom to allow the locked-out workers to return to work so that they could earn their pay.

Eskom is facing a leadership crisis after four of its most senior executives were suspended, including the chief executive. Sources say the company’s chairman Zola Tsotsi could face a vote of no confidence.

Medupi, in central South Africa, and its sister coal-fired plant Kusile are seen as vital to Eskom in providing 10,000 megawatts of new power by 2020 as the troubled firm tries to reverse the worst power outages afflicting Africa’s most advanced economy since 2008.

Eskom said it would cut power for the second consecutive day on Thursday due to supply shortages.

The utility has implemented controlled power cuts in Africa’s most advanced economy this year to prevent the national grid from being overwhelmed. South Africa’s government says the electricity outages are expected to last two years.

Standard and Poor’s cut Eskom’s credit status to junk last Thursday, saying the suspension of executives had caused a loss of confidence in the company’s corporate governance. (Editing by James Macharia and Keith Weir)

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