Organised business in Port Elizabeth and he rest of South Africa is smarting from the recent load shedding embarked upon by national utility Eskom.
Kevin Hustler, CEO of the Nelson Mandela Bay Business Chamber, speaking on behalf of his members, said; “The trust of business in South Africa’s power utility is steadily and rapidly eroding, especially in the face of the power emergency declared by Eskom on 23 November 2014. Large industrial users in South Africa have been warned to reduce their consumption by up to 10% to ease pressure on the national grid.
The situation, as it stands now, is untenable for businesses across South Africa. We call for absolute transparency from Eskom. The situation is such that playing anything other than open cards will set business permanently on the back foot. We are moving steadily down a road that will bring business to a standstill if the gravity of this situation is not acknowledged and dealt with appropriately and urgently. To demand that business reduce consumption by a further 10% places unacceptable pressure on those in the manufacturing sector, who are currently attempting to meet festive season demand. How are our exporters to meet demand for their products when their ability to produce and deliver to order is so severely compromised?
This is the time of year, also, that retailers large and small maximise their turnover. The situation as it stands with regards to electricity supply hinders their ability to profit during the festive season.
Small retailers such as for hairdressers, butcheries, bakeries and other stand to lose a significant portion of their potential earnings, due to electricity being their major utility input.
Load shedding disrupts everything from telephone systems to cash registers, lighting to machinery.
Businesses running 24/7 manufacturing lines suffer significant wastage – unscheduled stoppages and disruptions in power supply can cost large companies and manufacturers millions of Rands per day, and electricity disruptions have the potential to threaten the very existence of large and small businesses alike.
The quality and reliability of power and electricity infrastructure is a major cause of instability for business in Nelson Mandela Bay. The Nelson Mandela Bay Business Chamber has, over the last three years in particular, had ongoing engagements with the Nelson Mandela Bay Metro centred on the high electricity tariffs in our region, failing infrastructure including substation flare ups and collapse, as well as general maintenance and upgrades to the overall electricity infrastructure and grid. The current situation at Eskom adds considerably to the pressure under which business finds itself, and increases the challenge of doing business in our city to uncompetitive and nearly unsustainable levels.
We have suffered significant and serious employment losses, particularly the high energy users, who have shed over 950 jobs in the last three years alone. Without a steady and reliable supply of electricity, this number may very well climb. Though many businesses have contingency plans in place for periods of load shedding – including the use of a UPS (Uninterruptable Power Supply) and generators – many more do not.
Energy analyst Chris Yelland explained to Fin24 that the load shedding problems will continue, and possibly get worse, until Medupi and Kusile come online due to Eskom having inadequate generation reserve margins to deal with any operational challenges.
It appears from a consumers’ point of view, that we are expected to pay more, for less of a service from Eskom. The massive negative impact on the confidence of local businesses and international investor confidence in our region can never be underestimated.
We echo the South African Chamber of Commerce and Industry’s call for greater transparency from Eskom. Without it, we face a complete erosion of belief in South Africa’s ability not only to support local business, but to compete sustainably on a global scale.”
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