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Stage 6 hurts KZN businesses: Third disaster to hit province in the past year

KwaZulu-Natal districts said that the stage four load shedding is severely affecting the business sector. Economists said the economic impact of the loadshedding will have a long term impact.

Roselyn Obeng is seen here shopping by torch light. File Picture: Jason Boud

Published Jun 29, 2022

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Durban - As Eskom yesterday implemented Stage 6 load shedding for the first time since 2019, KwaZulu-Natal business chambers questioned how companies in the province were expected to survive on top of the other challenges they faced brought on by last year’s unrest, the Covid-19 pandemic and the recent floods.

Eskom said yesterday that Stage 6 power cuts had to be implemented due to the unlawful and unprotected labour action that had caused widespread disruption to its power plants.

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Last night, Eskom said following a productive meeting it had with union leadership, the National Union of Mineworkers and the National Union of Metalworkers of South Africa had urged their members to return to work immediately. However it said the system would still take some time to recover.

While the DA in eThekwini said yesterday that the city was still exempt from load shedding due to eThekwini Municipality using 200 megawatts less than last year and having compromised infrastructure, other industrial hubs and cities in the province are feeling the brunt of the power cuts.

Thami Sithole, president of the Zululand Chamber of Commerce and Industry, said that the area was an industrial town and uninterrupted power was crucial to businesses.

“In the Richards Bay area, we already had problems with electricity and sustainability of power due to issues with our substations and now we have added issues with load shedding. Businesses are suffering because there is a loss of income and a loss of opportunity.”

Sithole added that many businesses could not afford to run generators.

“During the load shedding, I went to malls and it’s just shocking to see how many businesses are forced to close and the fact is most of these businesses can’t afford generators. How much revenue is being lost during these times and how are businesses going to survive?”

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Andy Horton, president of the iLembe Chamber of Commerce, Industry and Tourism, said large businesses might be able to manage due to having generators but smaller ones would suffer.

“When there is load shedding, remember that the point of sale is down and card machines are down, only cash is taken which causes a loss in revenue. When you look at a place that manufactures fridges when there is load shedding they simply can’t work. And what about workers and the income they are losing out on? Even a hairdresser’s whole business depends on electricity.”

Horton added that load shedding was the third serious disaster that KZN businesses had faced in the past year.

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“We had the July unrest and looting last year, the floods in April and now the load shedding. How are people supposed to cope with this? It is of utmost urgency that load shedding ends. ”

Melanie Veness, CEO of the Pietermaritzburg and Midlands Chamber of Business, said that it was inconceivable that businesses should have to endure load shedding just as the economy was starting to ramp up again.

“Quite frankly, it’s devastating. All businesses are negatively impacted. Most small businesses don’t have generators, so can’t function at all during load shedding periods. Industry, which employs large numbers of people, is severely impacted – you can’t ramp factories up and down every few hours. Some of them take eight hours to ramp up, so they may as well just close when there’s Stage 4 load shedding.”

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Veness added that in a city like Pietermaritzburg, where infrastructure hadn’t been adequately maintained, load shedding triggered faults, which often resulted in extended outages.

“Honestly, we’re trying to win a huge battle with our hands tied behind our backs. It’s unreasonable. Far more established economies are struggling to reboot post-Covid. How on earth can we expect to do that post-Covid, the July riots and the floods with a disrupted power supply?”

Dr Ntokozo Nzimande, a senior lecturer in the Department of Economics at UCT, said that load shedding was one of the significant contributors to the country’s economic deterioration.

The power cuts would lead to a delay in the recovery from the Covid-19 pandemic and would put more pressure on the country’s supply side, he said.

“Meaning, that the total effect will be a huge drop in economic activity. If these power cuts persist, then recession is inevitable, and it will be sooner than expected.”

Professor Irrshad Kaseeram, of the University of Zululand’s Economics Department, said that load shedding had become normalised in the South African economy. It was the result of recurrent skills shortages and a lack of capital to modernise the electricity infrastructure and to create the ideal power generation mix of renewable and carbon technologies.

“Moreover, the lack of government capacity to coerce entire communities of free-riders to pay for electricity or face the full force of the law, augurs poorly for its ability to boost the economy to address the unemployment and poverty challenges. Without the right electrical engineering skills and prudent financial cash flows it’s impossible to provide efficient electricity supplies. It’s too costly for businesses to operate on diesel and petrol-powered generators to address frequent disruptions.”

Kaseeram added that no major company would want to invest in an economy where inadequate infrastructure for critical inputs such as electricity, rail, roads and water appeared to exist for the medium to long term.

THE MERCURY

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