Power cuts 'cost R331m a day'

2006-02-22 14:10

Donwald Pressly

Cape Town - Sunday's power outage in the Western Cape could cost the South African economy as much as R331m in lost economic activity, says official opposition minerals and energy spokesperson Hendrik Schmidt.

Schmidt said on Wednesday that South Africa was facing "an energy crisis" of the government's own making.

Schmidt said: "Had the government taken the necessary steps to improve our electricity infrastructure years ago when the need first became apparent the country wouldn't be facing its current predicament.

"It appears that Eskom and the City of Cape Town are now involved in an unbecoming spat, where each is try to blame the other.

"While Eskom can't generate enough electricity, the city council has for its part failed by being wholly unable to inform residents and businesses when blackouts will occur.

"This has not only caused inconvenience but has come at a great cost.

R331m loss in a single day

"Assuming that a power outage brings 50% of economic activity to a halt, a province-wide power outage like the one that hit the Western Cape this Sunday could cost the economy as much as R331m in a single day.

"The additional cost to the economy in terms of ruined refrigerated goods, petrol wasted in traffic jams and time wasted stuck behind the wheel is incalculable. Assuming we have a province-wide power failure like the one experienced on Sunday every two months until the new gas turbines come on line in mid-2007, the cost to the provincial economy could be far in excess of two billion rand."

"This estimate does not even include the cost of rolling blackouts that have a more localised impact.

"There is also no telling how much worse the power outages will be as we go into winter, during which people traditionally demand more electricity.

"It is high time that the actors in this drama started taking responsibility. Failure by Eskom, its government shareholder the department of public enterprise and the department of minerals and energy to plan for our growing economy is destroying value and jobs.

"This will have a direct impact on poverty alleviation efforts as our economy finds itself hobbled on a regular basis," he said.

- I-Net Bridge (Business)