Sechaba ka’Nkosi
SOUTH AFRICA had yet to appoint banks to manage state asset sales needed to fund Eskom, three people with knowledge of the matter said yesterday.
This brings into question a statement by Public Enterprises Minister Lynne Brown that almost R23 billion would be raised within two weeks.
Eskom needs extra funding to keep the lights on. It is using expensive diesel turbines, usually used to produce power at peak times only, and that has eaten into its operating cost budget.
The extent of the power utility’s increasing troubles was clear yesterday as South Africa experienced a fifth consecutive day of power cuts, the worst since 2008. Economists and analysts warned that the losses to the economy would be felt for months.
Eskom cut power due to technical faults from Sunday to yesterday, including outages of up to 4 000MW on Tuesday and Wednesday. Yesterday Eskom cut up to 2 000MW but warned the system stayed constrained.
The Energy Intensive Users Group of Southern Africa, which represents 31 of the country’s largest electricity-consuming companies, said the impact of the power cuts would be felt when businesses tabled their production figures in the next few months.
The group’s spokesperson, Shaun Nel, said while he could not quantify the extent of the impact on production, it could be larger than expected.
“We are already dealing with international investors who are questioning the quality of our production obligations, and there are even questions on whether we would be able to meet them,” Nel said.
“It’s a vicious perception that casts doubt not only on our reputation as companies, but on the perception about our economy as a whole.”
On Wednesday, Brown said the escalating power generation problems facing Eskom were no sign that the country was edging closer to a total blackout.
But economists warned that while the country was nowhere near a total collapse of the grid, the impact of this week’s power cuts would leave a severe strain on an already struggling economy.
Energy analyst Mike Rycrost said it would take time to get Eskom running and to build confidence in the country’s ability to stabilise the grid.
“I know people and the minister [Brown] talk about two years, but it could very well take us up to five years to break the cycle of power cuts,” he said.
Investment Solutions economist Chris Hart said production figures would show the extent of the long-term effects that the economy had suffered as a result of power cuts.
Professor Ben Smit of the University of Stellenbosch’s Bureau for Economic Research said the damage that had already been done to the economy would take years to overcome.
Yesterday the strike at Medupi Power Station continued as 1 700 workers rejected Eskom’s offer to return to work on Wednesday. The workers were demanding R10 000 bonuses for the completion of station’s first unit.
Numsa, which is representing the workers, said while it would continue its negotiations with Eskom, workers would not return to work until bonuses were paid and they had received subsidised accommodation, and that contractors at the power station ended retrenchments.
In an effort to plug the power shortage, Energy Minister Tina Joemat-Pettersson said yesterday that the government was planning to double the amount of renewable power from private companies to secure a further 6 300MW to the grid. – Additional reporting by Bloomberg