JOHANNESBURG — Businesses have shut up shop, generators have sold out and cars play cat-and-mouse at darkened road junctions in South Africa, where power cuts have suddenly become a daily reality. Under white minority rule, South Africa subsidized electricity heavily to attract foreign investment, although much of the black-majority had no access to power.
In the twenty years since apartheid ended, most of the population has been connected to the grid, although around 15 percent of the poorest still have no electricity. But investment in new power plants has not kept up with demand.
“This government has ignored the problem for a decade and now it's too late,” said pensioner Hugh Gardener, scouring a hardware store for gas camping stoves, candles and torches.
Periodic rolling blackouts, which spooked investors in 2008, returned in March this year. Last week, things got worse as creaking infrastructure buckled.
Households in most parts of the country have been without electricity for around 4-5 hours a day since Friday, when state utility Eskom lost up to a third of its 42,000 megawatt capacity as plants shut down for emergency maintenance.
“We're starting to see dark days ahead,” Gardener said. Eskom's Chief Executive Tshediso Matona said on Monday that regular power outages could continue well into 2015 and it might take 3-5 years to restore reserves needed to avoid blackouts.
“The status quo as it is, is untenable. Something has to give,” Matona said, citing various problems, including a lack of maintenance, power plant breakdowns and a dearth of funding.
The rand fell to its weakest level against the US dollar in six years on Monday and fears power outages could hit the mining sector helped push platinum, of which South Africa is the biggest producer, 1.4 percent higher.
At grass-roots level, generator salesman Matt Sly said he received 500 emailed inquiries in five hours on Tuesday from customers ranging from large industrial users to homeowners, swelling his inbox to almost 7 times its normal daily size.
“We're sold out,” he said from his now empty warehouse.
Eskom, which supplies almost all the country's electricity, says it will have a funding shortfall of 225 billion rand ($19.6 billion) over the next four years and will have to increase electricity tariffs.
The ruling African National Congress (ANC) said in October it would inject 20 billion rand ($1.8 billion) of cash into the struggling utility and it could also convert its existing 60 billion rand subordinated loan to state-owned equity.
But the sum is due to come from the sale of “non-strategic assets”, privatization that is sure to come under attack from President Jacob Zuma's far-left opponents and powerful trade unions.
Economic growth averaged 5 percent in the five years before a 2009 recession, but has languished below 2 percent since. Ratings agencies Standard & Poor's and Moody's cited the bleak power outlook as a contributing factor in recent credit downgrades. Businesses say it is set to get worse.
“Major industry hasn't returned to full capacity since 2008 because of power constraints,” said Shaun Nel, spokesman for the Energy Intensive User Group of Southern Africa (EIUG), a body representing businesses consuming 41 percent of the country's power.
“What is worrying is the impact in the future because projects are being cancelled, investment is being deferred or scrapped,” said Nel, whose members account for 27 percent of South Africa's GDP, in industries like mining and manufacturing.
The steel and engineering sectors alone have lost 6 billion rand ($520 million) in output due to power outages in recent months, according to an industry body.
For the general public, the outages are wreaking chaos.
Many restaurants, shops and offices simply close their doors when the blackouts hit, although some, including large shopping malls, have invested in generators to stay open.
Drivers on Johannesburg's busy streets blast their horns and jerk their cars forward in risky dashes for the other side of heaving junctions where traffic lights have gone dark. — Reuters
