Cape Town - 141102 - Rolling blackouts due to Eskom's power grid being under severe strain resulted in the Cape Argus Newsroom being left without power and the production team having to relocate temporarily to Allied Media in Epping. Picture: David Ritchie
Cape Town - 141102 - Rolling blackouts due to Eskom's power grid being under severe strain resulted in the Cape Argus Newsroom being left without power and the production team having to relocate temporarily to Allied Media in Epping. Picture: David Ritchie

Eskom blacks out firm profits

By KAMCILLA PILLAY And SAPA Time of article published Dec 9, 2014

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Durban - As Durban Chamber of Commerce and Industry chief executive officer (CEO), Andrew Layman, was describing the economic gloom caused by load shedding, the lights went out at the chamber’s offices.

In the darkness at the Lion Match Office Park, Layman said it was difficult to quantify the losses incurred by retailers and manufacturers over a weekend, or since the beginning of the month.

But he said they would be “huge” because December was generally busier than other months.

“Shops have a huge wastage of raw materials because of the lack of electricity. The losses of load shedding will run into the billions, if it hasn’t already,” he said.

Layman said stores lost out on purchases because their card machines could not work without electricity, while many fell victim to theft from shoppers who escaped with their items once the lights went out.

While Eskom yesterday denied there was a power crisis, economists have warned of huge losses in the economy.

Eskom CEO, Tshediso Matona, said in Johannesburg yesterday that the utility did not anticipate implementing its stage three schedule of rolling blackouts again this month.


Stage one allows for up to 1 000MW of the national load to be shed, stage two for up to 2 000MW and stage three for up to 4 000MW.

Matona earlier apologised for recent power blackouts.


“It pains us to have to load shed. We know the public is not pleased. We load shed out of responsibility… A complete blackout would be catastrophic and can take weeks to recover from.”

He said the power system would remain tight until the Medupi and Kusile power stations started producing power, probably in 12 to 18 months.


Economists say power cuts cost the economy R6.8 billion last year and “conservative” estimates show that this year will be just as bad.

In a report commissioned by Barclays, researchers Peter Worthington and Miyelani Maluleke found that last year, the country had – in a “rough calculation” – lost a shocking 0.2 percent of the Gross Domestic Product (GDP), which works out to roughly R6.8 billion.

Pan African Investment and Research’s chief economist, Iraj Abedian, said the consequences of load shedding were “devastating” to all rungs of the supply chain ladder.

“Decommissioning machines, then re-commissioning them can lengthen the process from two hours to far longer. These delays cost manufacturers hundreds of millions. This is not realistic and this won’t be sustainable,” he said. “There are no medium or long-term plans to alleviate the pressure.”

These sentiments were echoed by Pierre van Tonder, chief executive of the Spur Group, who said their restaurant franchises “bore the brunt of substantial loss”.

The group owns 267 Spur Steak Ranch restaurants, 29 John Dory outlets, 61 Panarottis and 72 Captain DoRegos restaurants in the country.

“Besides losing turnover they have to continue paying wages, rates and taxes, rental and other overheads,” he said.

“From our perspective, the turnover loss for November was substantial; we will only be able to provide an accurate number by December 15 once we have received our franchise fees.

“A rough estimate for November would be a loss of R20 million turnover to our franchisees, which is about R1 million gross loss to us in income, pre-tax.”

Van Tonder said with the current state of affairs and “the Eskom table jumping all over the place”, he could not even try to say what the estimated losses would be in total.

“Bear in mind that December is one of our highest trading months and the consequences could therefore be somewhat nerve-racking, to say the least.”

Van Tonder said their franchisees included generators in their budget when establishing a store.

“With the current crisis, this will now have to be incorporated into the set-up costs of all restaurants, which means that between R450 000 to R500 000 per restaurant from a capital expenditure point of view will have to be added,” he said.

“(We want) to ensure the continuous well-being of our franchisees, and most importantly to ensure they remained consistent in the food they served.”

The company leader of the Ocean Basket Group, Grace Harding, said their franchises had taken the load shedding in their stride.

“We will do our best to accommodate all our customers, during load shedding or during regular operations. We will make a plan - whether it means cooking on gas or using generators,” Harding said. “As South Africans, we know what adversity means, so blackouts will not get us down.”

According to Eskom’s Twitter account today, the parastatal said it had commenced load restoration.

“Load shedding has been terminated for the day and electricity will be available to all areas in a few hours.”

Daily News

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