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Eskom stops new developments
05/03/2008 08:01 - (SA)
James-Brent Styan, Beeld
Johannesburg - All new construction projects countrywide that are bigger than a residential home will be blocked by Eskom for the next four to six months. New townhouse complexes, petrol stations, factories and all other construction projects where electricity provision needs to be obtained from Eskom in advance will be delayed by up to six months.
New construction projects must obtain electricity certificates before construction can begin. Eskom will delay this process by provisionally not issuing any certificates.
Tito Zwane, a regional manager at Eskom, in charge of consumer services, disclosed the news on Tuesday during a social event with Johannesburg's City Power for enterprises in the city. Tony Stott, a senior manager at Eskom, later confirmed this new strategy.
Limit economic growth
Mike Schussler, an economist from T-Sec, says this decision could significantly limit economic growth. "Job creation is going to take a severe knock. Fourteen guys that could've been employed at a new petrol station are now going to remain unemployed for longer."
Schussler says he believes that the four to six month time period is merely an indication and that they expected it to take longer than six months. "Projects that now have to wait six months will only be able to be helped in six months or longer."
Stott said the delay period will be applicable to all big developments in all Eskom service areas countrywide. "We don't want to kill growth but we definitely don't have enough power for 9% growth in Johannesburg anymore."
Eskom will still have to fulfil the requirements for all projects to which it bound itself until the middle of February. "All projects thereafter will fall under the new plan," said Stott.
Hugh McGibbon, Eskom's distribution manager in the central region (which includes Gauteng), said the message to developers was that projects would have to be delayed for the next four to six months. "That includes big expansion projects at existing developments."
No power available
Silas Zimu, chief executive of City Power, said that whereas other public service providers continue to approve new projects, power suppliers can no longer do so. "There simply isn't any more power available on the networks for additional consumers," he said.
Keith Brebnor, chief executive of the Johannesburg Chamber of Commerce, said economists have already said the country's desired 6% economic growth was unattainable. "The new delay of development projects causes the Chamber of Commerce to worry even more about the prospects for economic growth in the future."
An official at the Johannesburg Department for Economic Development who wished to remain anonymous said the power crisis must be taken into account when considering economic growth. "We can't run from the crisis. Fortunately South Africans are particularly good at crisis management," he said.
- Beeld
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