SA's R25bn power backlog
09/06/2008 13:14  - (SA)  

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Johannesburg - Electricity authorities called for action on Monday to deal with a R25bn maintenance backlog that could further stifle economic growth.

"On the basis of an analysis that was recently conducted, the current electrical infrastructure maintenance and refurbishment backlog is estimated to cost R25.7bn," Amos Masondo, chairperson of the SA Local Government Association, told an electricity distribution maintenance summit in Johannesburg.

"Restoring the integrity of distribution networks throughout South Africa to an acceptable level seems to be a mammoth task," he added.

Minerals and Energy Minister Buyelwa Sonjica told delegates the government invested some R1.8 billion annually into new electricity distribution infrastructure but little money was injected into maintenance.

"There are limited funds directed to the maintenance and refurbishment of the old electricity distribution infrastructure," Sonjica said at the two-day summit that ends on Tuesday.

"The lack of maintenance and refurbishment of the electricity distribution infrastructure poses a threat to our economy."

South Africa posted a growth rate of only 2.1% in the first quarter of this year, compared to 5.3% in the fourth quarter of last year, partly due to rolling electricity blackouts, economists said.

"The upcoming 2010 Fifa Soccer World Cup and the rapid economic growth of the country demand more improvement on the capacity of the electricity distribution infrastructure," Sonjica added.

The summit is expected to discuss the implementation of Regional Electricity Distributors (Reds) which would take over the function of power distribution from municipalities.

'Shooting ourselves in the foot'

This would mean that consumers would pay their electricity bills to the Reds and not to municipalities. That would imply a loss of revenue to municipalities.

The Reds are to be established as public entities under the auspices of the Electricity Distribution Industry (EDI) Holdings.

The cabinet approved the proposal to create six Reds in October 2006 but it is yet to be implemented. The proposal said Eskom and the municipalities would become shareholders in Reds but that Eskom's shareholding should be reduced over time.

Masondo said the Reds would "assist in addressing the network maintenance backlog and promote equal treatment of consumers countrywide through a national electricity pricing system".

But Deputy President Phumzile Mlambo-Ngcuka told delegates there was "resistance in implementing EDI".

"There are mechanisms in place to ensure that municipalities and Eskom would not lose out," she said.

"We are shooting ourselves in the foot," said Mlambo-Ngcuka, urging delegates to embrace the concept.

"The regional electricity distributors will help in facilitating the upgrading of skills, sharing of expertise within the region, as well as investment in and refurbishment of the electricity infrastructure in a more coordinated manner," added Sonjica.

- SAPA

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