By Edwin Naidu, Justin Brown, Eleanor Momberg, Mary Corrigall, Keith Ross and Jeremy Gordin
The rolling blackouts that have plagued South Africa - caused by Eskom's need to keep electricity demand from swamping supply - have prompted a flurry of top-level meetings to alleviate the crisis.
Load shedding by Eskom, South Africa's electricity supplier, resulted in pandemonium this week and howls of protest from all over the country.
Leaders of Eskom, the government and business started meetings on Friday afternoon. Tomorrow Jacob Maroga, Eskom's chief executive, is set to meet more than 100 executives from major electricity consumers in Midrand, north of Johannesburg, to discuss the energy shortage.
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| 'Eskom is not providing adequate information to consumers' |
According to economists, the power crisis has endangered the country's economic prospects. They have estimated that the costs to the economy will run into billions, result in job losses and hamper South Africa's plans of achieving 6 percent growth by 2010.
They have pointed out that load shedding over the past 12 days has come amid rising inflation, the strong possibility of another interest-rate hike this month and fears of a global recession that has already started affecting South Africa, with the currency closing on Friday at R7,03 to the dollar and R13,77 to the pound sterling.
Azar Jammine, the chief economist at Econometrix, said that the government could forget about a 6 percent growth rate after 2010 as power outages worsen over the next five to six years. There would be less investment, lower economic growth and reduced job creation, he said.
The crisis has prompted Lawrence Mushwana, the public protector, to demand an explanation from Eskom. After his announcement of an investigation, he was approached by the Human Rights Commission and the Freedom Front Plus for a formal inquiry.
"It is clear that Eskom is not providing adequate information to consumers to allow them to plan their lives and businesses around the load-shedding schedule," the commission said.
| 'Let's face it, we didn't do it as well as we might have' |
Rolling blackouts have hit workers hard in every sphere. Not only are they forced to work overtime to keep up with their workload, but casual workers, paid an hourly rate, are being paid less. If blackouts continue at the current rate, some workers could be laid off within a week.
Andrew Etzinger, Eskom's chief of demand side management, said on Friday that Eskom had "shed a great deal of electricity in a very short time" in the past week and that, "let's face it, we didn't do it as well as we might have. We could have, and we will, slice and dice things differently. We could do a much better job of load shedding and we will."
But he argued that load shedding had been a necessity. It would be disastrous if the country's electricity "frequency" - the ratio between supply and demand, which he likened to a human heartbeat - were ever allowed to fall into a situation in which demand was running away from supply.
"If the demand starts moving away from supply, you get a kind of heart attack - all the giant generators would start shorting and we would have a national blackout which would be a real crisis."
Etzinger said electricity reserves had dropped during the past year from 7 percent to minus 17 percent because there had been a decline in generation performance. He conceded that there would be a "shortage capacity situation" for at least another seven years.
"The fact is, in this country, for a long time we have had a surplus of electricity at a cheap price - far cheaper than in other industrial nations. So it has made sense for the giant investors, whose plant needs massive amounts of electricity, to invest here. All that's happened now is that we have to manage the resource differently. It is simply going to cost investors more - this does not mean that they have to halt their future projects."
Earlier this week, Bongani Nqwaba, Eskom's finance director, said South Africa should be closed for new big industrial projects until 2013, when new power projects costing R300 billion become operational.
The country's major power-hungry industries, including mines and smelters, have been paralysed for hours on end by the blackouts. On Friday Anglo Platinum said the crisis would affect its R39 billion expansion plans, while the Chamber of Mines warned of multibillion-rand projects being thwarted by the problems.
Jerry Vilakazi, the chief executive officer of Business Unity SA, said the blackouts had already cost business "millions" and the situation was eroding international confidence in the country as an investment destination.
"The implications of the scenario [to halt business projects until 2013] recommended by Eskom will reduce business confidence and discourage new investment and capital expansion programmes, negatively affecting growth. This is more disturbing given the predicted global economic slowdown in 2008," he said.
BHP Billiton, the world's top mining house and South Africa's single largest power consumer, said the power outages had hit its three massive aluminium smelters, affecting production. But Bronwyn Wilkinson, a company spokesperson, declined to disclose the specific impact.
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