Mbeki: There is no electricity crisis

Recent electricity failures posed no crisis but an opportunity for economic growth through infrastructure expansion, President Thabo Mbeki said on Thursday. There was no reason for investors to worry, he told the National Assembly.

 

“We shouldn’t frighten ourselves too much,” Mbeki said in response to parliamentary questions. “Yes, indeed, there was a problem.
There were regrettable losses suffered by many businesses, but there is no crisis.

 

“Whatever needs to be done to make sure that the economy grows and new investors come into the economy is being done on the energy and other sides.”

 

Enough power was available to meet the country’s needs, and work was being done to expand that, Mbeki said.

 

There had been problems at the Koeberg nuclear power plant in Cape Town as well as poor maintenance of transmission lines and other equipment in places like Johannesburg. This could partly be blamed on the country’s projected economic growth, and consequent electricity demand, having been underestimated.

 

But “we shouldn’t be holding out as threats to local and foreign investors that something disastrous is going to happen with regard to energy and therefore ... they must be on their toes,” the president said.

 

“There are challenges ... which are being worked on.”

 

Projected capital expenditure of R84-billion by Eskom should boost the economy and sustain the government’s coveted 6% growth rate.

 

Mbeki said the country had about 37 000MW of electricity available nationally, with an additional 2 000MW for high-peak periods. Projected demand was about 35 000MW. The situation was “tighter than we would have preferred”, but manageable. Approved projects would add 7 260MW in the next few years, and planned projects a further 10 382MW.

 

Asked if he would set up a commission to probe the government’s “failure to meet South Africa’s national electricity capacity needs”, the president said this would serve no useful purpose.

 

He also had no intention of taking steps against Minister of Public Enterprises Alec Erwin for inferring sabotage was to blame for a failure at the Koeberg nuclear power plant—a statement the minister later denied.

 

Erwin had been consistent in stating that the “accident, or whatever it was,” was under investigation, Mbeki said. An announcement, including a report to Parliament, would be made at the conclusion of the probe. The government had information that the problems at Koeberg arose “inter alia from an incident that required investigation by the security services”, the president added.

 

Asked about estimated losses of some R5,5-billion to businesses, Mbeki said a task team under provincial Premier Ebrahim Rasool was considering “mechanisms of support”. Such losses were “tragic and regrettable”, the president said, adding it was imperative for businesses to be insured for national disasters.

 

“We trust that the insurance industry will provide the affected businesses with appropriate compensation.”

 

It was put to Mbeki by Democratic Alliance MP Martin Stevens that “one more screw up like the last one will have all investors bolting for the exits”, apparently a pun on Erwin’s explanation that a bolt in a generator caused the damage at Koeberg.

 

But the president said there was no evidence of the blackouts having had any adverse impact on investment. “The notion that there has been a rush away from investment in South Africa is not correct.”

 

Large users of electricity approached Eskom well in advance to secure their supply, and the government would be aware of their needs, he added.

 

Mbeki described Eskom as a flagship entity with a solid international track record, and denied reports that the power cuts prompted a foreign company to withdraw plans to erect an aluminium smelter in South Africa.

 

He announced that a rotor loaned to South Africa by the French to replace the one damaged at Koeberg was on its way to Cape Town on the naval vessel SAS Drakensberg.

 

There was also time for some quipping: African National Congress MPs took offence when DA member Hendrik Schmidt asked Mbeki to apologise for a government decision to refuse Eskom permission to build new power stations.

 

Yunus Carrim asked the president when he thought the DA would see the light.

 

“They will no doubt plead that they can’t see the light when Eskom has switched off the light,” Mbeki said.—Sapa

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