/ 29 May 2008

Eskom: Power crisis to remain for years

South Africa’s electricity crisis will remain for years and power cuts will continue well into the future, Eskom said on Thursday.

”We are going to be in this [crisis] for years,” Eskom CEO Jacob Maroga said in a presentation in Johannesburg. ”The threat of load-shedding is with us for some time.”

Eskom has struggled to meet demand for electricity in Africa’s biggest economy — with critics citing years of underspending on generation capacity — resulting in power cuts that forced key mines to halt production for five days in January.

Meanwhile, Eskom’s proposed 53% tariff increase will have a negative effect on the economy, Business Unity South Africa (Busa) said on Tuesday.

Speaking at the second day of public hearings of the National Energy Regulator of South Africa (Nersa), Busa’s Roger Baxter said studies had shown that the economic impact of the hike would reduce the country’s gross domestic product and would lead to about 55 000 job losses.

”… It will have the biggest negative [effect] on the economy,” Baxter said.

”Pricing is not the only solution; effective leadership and strategic appropriation of management is important,” he added

Busa said that time was needed for business and consumers to get used to the increases.

”It is a process, not a one-off event. It will take long for people to adjust.” — Reuters