The Effects of Underspending In A Power Utility
The Da Vinci Institute’s Master’s graduate, Monyadiwe Selina Moloi’s career started in Eskom (Generation Division), from 2001 to date. She has experiences in life cycle planning, project management as well as portfolio management. In her experience with Eskom’s Generation Division, in recent years, Monyadiwe notes that there had been challenges with capital projects’ budget spending – hence the aim of her dissertation work entitled: Capital projects budget underspending in a South African power utility – a project management perspective, was at investigating factors contributing to capital projects’ budget underspending specifically in South African power utilities from a project management perspective.
This study focuses on Eskom’s Generation division with over 2000 capital projects across the generating fleet that consist of routine capitalised replacements and major modifications to deliver on the plant performance objectives. The inability to spend the budget capital translates to the project objectives and benefits being deferred or not realised, which works contrary to restoring the plant health and improved technical performance.
Consequently, the study identified factors that contributed to capital project budget underspending, and those included: insufficient support from some of the stakeholders involved in projects, insufficient resourcing of most departments that were involved in projects, and the unfair distribution of projects among the project management department personnel – based on skills and experience – and forced changes to the project execution plan and schedule due to outage deferments.
Further findings from the study indicate that the aforesaid factors negatively affected project schedules and, therefore, negatively affected project success and subsequent portfolio delivery. Findings from this study on factors which contributed to capital project budget underspending from the South African power utility were in line with findings from the construction sector. One positive aspect from the findings was that Eskom ensured that project managers were sufficiently trained on tools and systems that they required to do their jobs, which was contrary to what was found in literature regarding contributing factors to budget underspending on projects. Monyadiwe reckons that findings that emanate from this research will potentially assist the power utility to improve on its capital budget spending.
Was it a tough journey? “My study journey with The DaVinci Institute started a long time ago. It was not an easy one because there were many challenges along the way which may have easily persuaded me to give up on my studies. I am just grateful that after several re-registrations, especially for the research module, I was not deterred”, concedes Monyadiwe. Her willingness and persistence throughout the qualification process have been invaluable, she further admits.
Monyadiwe plans to continue working on her personal development in order to advance in her career. Monyadiwe encourages learners who are beginning the research journey to start early so that they can complete it on time. She also urges learners to enjoy the process and ask for assistance when facing challenges, instead of worrying about completing their work.