A slowdown in nuclear projects is posing no problem for Lesedi Nuclear Services. The company is successfully drawing on its comprehensive base of resource and skills to further cement its reputation as a well-established and reliable player in all sectors of the energy market, as Andrew Pelis discovers.
South Africa is a nation that has developed significantly over the past 30 years. As the country’s infrastructure has improved, so the demand for power has increased, with alternative sources of energy leading to the construction of the Koeberg nuclear power plant in the 1980s. As requirements have continued to escalate, the nuclear debate has resurfaced, positioning Lesedi Nuclear Services in the driving seat for any future programmes.
“We are a project management and design engineering company but also carry out maintenance activities at the Koeberg nuclear power plant,” explains Eric McDonald, managing director of Operations for the Cape Town-based company.
McDonald goes on to explain the origins of Lesedi Nuclear Services. “Intens Engineering was initially founded in 1984 to provide commissioning services to Koeberg Nuclear Power Station. In 1999, we formed Lesedi Engineering, a start-up Black Economic Empowerment [BEE] company, to provide services to Koeberg. In 2001, Intens and Lesedi Engineering amalgamated to form Lesedi Nuclear Services. We sold 45 per cent of the company to AREVA; then in 2006 we sold another six per cent to AREVA and became a full subsidiary.
“Lesedi’s integration into AREVA has been beneficial for both companies,” McDonald continues. “Lesedi now has access to crucial nuclear expertise. We have already sent some of our engineers, technicians and artisans to obtain experience in different parts of the world where AREVA is present. They return with extremely valuable knowledge that is immediately applicable in the work that we do for Eskom in South Africa. So, strategically, obtaining a parent company of AREVA’s magnitude was highly fruitious for Lesedi.”
Over time the company has evolved and built on its capability and capacity in areas like project management, design engineering, maintenance and operations, plant engineering and technical personnel. This has given the company greater stability by diversifying away from the nuclear energy market and today, 80 per cent of Lesedi’s work is non-nuclear, although that may change in the future.
Apart from ongoing maintenance and refuelling work at Koeberg Nuclear Power Station, the company’s recent project delivery for Eskom involved the construction of South Africa’s first open cycle gas turbines (OCGT) in Atlantis and Mosselbay. “We were involved in two lots of 150 megawatt gas turbines,” explains McDonald. “Five were installed in Mosselbay on the Southern Cape and nine more in Atlantis on the Western Cape. Lesedi was responsible for the mechanical erection of all 14 turbines in a contract with Siemens. In addition to this, Lesedi also carried out full EPCC (engineering, procurement, construction and commissioning) of the balance of plant (BOP) in contract with Eskom.” The BOP consisted of fuel offloading, fuel cleaning, fuel forwarding, fire water systems and potable water systems.
Government discussions in 2008 on the construction of a further nuclear power plant have been suspended as a result of the global economic crisis, but as demand for energy soars in South Africa, plans are not yet dead in the water. Lesedi, as the only BBBEE company in the country with nuclear experience in its field, is well-placed to take advantage of any nuclear renaissance.
“The talks of 20,000 gigawatts of nuclear power by 2025 have been put on hold for now; however, we have also developed into other areas of the non-nuclear market,” McDonald asserts. “We have ventured into conventional power stations because there simply weren’t enough nuclear power stations in the country.”
The shift in strategy began in 2002 when the company acquired an engineering company, Signum Engineering, and was transformed into a project management and engineering entity. The move precipitated a need to train staff in new skills and McDonald says that the current workforce of roughly 160 (comprising of 105 permanent staff and long-term contractors) has embarked on the EIT (Engineers-in-Training) programme with the aim of multi-skilling.
“Because of the chronic shortage of nuclear-related skills in South Africa, we provide 18 months of training in a nuclear environment so that we can generate a base of skilled workers,” McDonald states. “As part of AREVA—a major international company and global nuclear industry employer—Lesedi recruits international talent and frequently sends key employees overseas for international training and exposure. As a proud South African company, Lesedi clearly believes in the future of its home country. Our investments are therefore varied and long-term in nature. We have invested in developing a variety of business support skills for different levels of our employees in order to ensure high standards of delivery. Crucially, we have also established a highly successful Engineers-in-Training programme aimed at providing real life nuclear project work to recently qualified young engineers of all backgrounds. After a careful selection process, the graduates are introduced into existing project teams and guided along over a two-year period.”
Lesedi’s success can largely be attributed to the company’s highly evolved project management capabilities, coupled with the group’s diverse multi-disciplinary engineering skills. “Our project managers are well trained and highly qualified to execute projects—either on a turnkey or individual project basis,” says McDonald. Lesedi’s project management processes were developed in accordance with the philosophies detailed in the Project Management Body of Knowledge Guide (PMBOK Guide). Each project is managed in accordance with the principles of fixed cost, defined scope, WBS (work breakdown structure) and agreed completion dates.
Safety is equally of paramount importance to Lesedi, which has to comply with AREVA’s stringent guidelines. “We have also attained the NOSA Five Star rating within South Africa—standards are the core of all of Lesedi’s operations,” says McDonald. “The company’s ISO 9001:2008 and ISO 1400 accreditation are important indicators of our determination in this regard. At the moment we are also pursuing the OSHA 18001 standard for health and safety. So from an organisation perspective we are really focused, and as you can appreciate, within the nuclear industry, everything needs to be of the highest standards and obviously our procedures and processes reflect that.”
McDonald says that the role of technology cannot be understated in the company’s operations; in particular, he earmarks the engineering calculation package as vital within the design phase. “You need proper control and management on these projects and about three years ago we implemented an IFS system which has proved invaluable and provided a quick return on our investment.”
Social responsibility is something else that Lesedi takes very seriously, as McDonald describes. “We have a definite social responsibility programme in the area where we are based. We provide financial support to an institute in the local black community close to Koeberg, where we draw our lower-skilled resources from. We also support a local school for disabled children and support the local soccer team, providing kit and funding their transportation to games.”
While plans for further nuclear power plants in South Africa remain on hold, McDonald has many reasons to be upbeat about Lesedi’s future. “At the moment our order book is full for 2011 and 2012 and we only operate in energy markets presently. “If growth happens quickly we have to be prepared for the implications and at the moment we can look to our resource pool and tender for work. Of course we may need to redefine this if demand increases significantly—having the skills in place is crucial.”
Earlier this year, Lesedi opened its new head office in Century City, Cape Town—a 3,500 square metre site, purpose-built to allow the company to carry out its work. “We invested around R50 million on the project and it not only improves communication by bringing everyone under the same roof, but gives us the scope for future expansion in anticipation of the nuclear return,” McDonald concludes. www.lesedins.co.za
