‘Focus on maintenance’

2008-05-18 00:00

The President’s International Investment Council (IIC) has advised the government to urgently focus on shortcomings in maintenance of electricity infrastructure.

The electricity crisis was discussed during the bi-annual meeting, held at San Lameer on the KZN south coast between government and the IIC — a group of top industrialists and businessmen who serve as advisers to South Africa.

The council also warned that SA’s low energy prices are not sustainable and that price increases are necessary to encourage investment in electricity. Members urged the country to develop renewable energy sources, such as solar power.

IIC member Percy Barnevik, chairman of the board of AstraZeneca, said he has known Eskom since 1978 and he was surprised when the electricity shortage began.

On SA’s earlier belief that the private sector would invest in the energy sector, Barnevik said he warned that they should not expect too much from the private sector because the prices are too low and not in line with the market. With subsidised prices it is difficult for the private sector to make investments.

President Thabo Mbeki said the electricity crisis has not harmed the economy so far and indicators are that the economy continues to grow and develop.

However, he added that the council has warned that they need to act fast in managing the situation to avoid any future impact. "They told us to push very hard at building additional electricity capacity. There is a global demand for electricity generation equipment, it is not just a South African problem," he said.

Journalists were told that rising food prices and the changing global economy were also discussed.The council called on the government to carry out more long-term scenario planning and also to plan for different scenarios.

Trade and Industry Minister Mandisi Mpahlwa, who led the report-back, said he believes the IIC will continue its advisory work. "This is the 13th meeting of the grouping and we do intend to have a further meeting this year …"

Those at the briefing included the ministers of Minerals and Energy and of Public Enerprises and council members; Masaki Miyaji, corporate adviser to the Mitsubishi corporation; Sir Sam Jonah, non-executive chairman of AngloGold Ashanti; and Anne Lauvergeon, chairman of the executive board of Areva.

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