Johannesburg - The rising number of shopping centres, banks and car dealerships is a sign of prosperity in Lephalale, Limpopo, where Eskom is constructing the coal-fired Medupi power station.
“The life expectancy of the economic boom is 30 years due to another power station and all the mining activity,” Wayne Derksen, the president of the Lephalale Chamber of Commerce, said. He was referring to Coal 3, the third power station that will be built by Eskom once Medupi and Kusile have been completed. In addition, the construction of a new coal mine by Resource Generation is likely to create 800 jobs.
Over the past three-and-a-half years new property worth R2 billion has been constructed in Lephalale, among them 25 000 houses and a R170-million shopping mall. According to Eskom, job creation has peaked at 17 000 direct jobs during construction.
Derksen said that in the informal sector many catering, laundry, transport and labour camp accommodation businesses had opened.
Lephalale council’s income from revenue including rates and taxes has more than doubled to R212 268 for the 2013/14 financial year from R83 789 in the 2007/8 financial year as a result of Medupi.
Steph Beyers, a director for development at Moolman Group, which built the R170m Lephalale Mall, said the town’s economic “bubble will burst” once the construction of Medupi was complete. He said there would be a “slowdown” once Medupi construction neared completion and the construction workers and consultants left town.
“We, however, believe there are and will be enough other capital projects commissioned in the near future. For example, new mines, the expanding of existing mines, independent power stations, upgrade of council infrastructure and so on that will again put and keep the town of Lephalale on a growth path,” Beyers said.
The irony is that while Medupi is under construction, Lephalale does not have enough capacity to provide power to all residents, according to Derksen.
“We don’t have any electricity for development, and all the businesses have ground to a standstill.”
Khoroshi Motebele, Lephalale’s executive director for strategy, said the council could not meet the demand for power. “We are under pressure in terms of electricity.”
The municipality has halted new connections to the grid until Lephalale’s new substation is completed in the latter part of 2015. Motebele said the municipality was resolving the issue.
Derksen said the town’s businesses would have benefited even more from Medupi’s construction had they been consulted in the initial planning.
“Local businesses were never properly informed about the needs required to build a station of this magnitude. Being so poorly prepared meant that many economic opportunities were taken up by greedy multi-national companies.”
While there had not been much increase in serious crimes such as murders and rapes, there had been an increase in drug trafficking, house burglaries and armed burglaries, Derksen, who also owns the town’s biggest security company, noted.
“Since there are large quantities of trucks bringing in equipment and material, prostitution has boomed, bringing with it undesirable diseases and the like.” - Business Report