Fin24

SA needs R35bn power boost - lobbyist

2012-10-09 15:38

Johannesburg - South Africa needs to spend R35bn to maintain neglected distribution networks, or risk further backlogs, the Free Market Foundation warned on Tuesday.

"We're in a serious situation," the lobby group's spokesperson Eustace Davie told reporters in Johannesburg.

Electricity was used by local governments to cross-subsidise other goods, he explained.

In addition, a decade-long attempt to restructure distribution meant municipalities had no incentive to invest in electricity infrastructure when they might not benefit.

As a result, spending on the grid itself had been neglected. Davie recommended municipalities should either contract out the maintenance, or sell off the grid.

Doug Kuni, MD of the Independent Power Producers' Association, said economic growth depended on growing the electricity supply. Currently, some 5000MW was lacking in the economy.

"You cannot grow your economy without new electricity," he emphasised.

Eskom's strategy of buying back power from large energy users was keeping the lights on, but at the cost of economic growth.

Blackouts in 2007 and 2008 had cost the economy between R50bn and R119bn, he said.

But independent power producers could not distribute power directly to consumers without Eskom, which owned the grid.

The solution was to establish an independent grid, either under government control or at least partially privatised.

Consumers would benefit, as producers could compete to deliver energy at the lowest price, Davie said.

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Comments
  • nikondaniel - 2012-10-09 15:48

    Government can use Zuma's planned R231 million house upgrade towards it for a start...

      fussed.anderson - 2012-10-09 16:07

      But it will grow without the anc

      matshobana.siziba - 2012-10-09 16:26

      The policymakers have long been aware that the country was facing power shortages its well documented everywhere,but because some political party believes in appeasing its people making them believe that services can be accessed free of charge - we find ourselves in this predicament.

  • oscar.pretorius.52 - 2012-10-09 15:52

    I know of R203 million rand that the president can donate

      darryl.maze.5 - 2012-10-10 08:45

      And all the top eskom officials can halve there exorbitant salaries.

  • eugene.muller.7 - 2012-10-09 15:52

    Mmm...the R27bn or so the cANCer stole could have made a dent in that bill.

  • phillip.vancoller - 2012-10-09 15:55

    Well done anc-well done,you zuma and your mamparras!!!

  • daleinn - 2012-10-09 16:00

    not again.. its eskom... another well planned parastatal..

  • denis.dendrinos - 2012-10-09 16:09

    LOL!!!!!! Ah the real challenges which should have been thought of in 1994, Easy to say "Free electricity for all", but quite another thing to implement it. A strat session should have been implemented as to what is needed and how to fund it and who will build it. But we were too busy changing names and setting up investment houses and drinking Johnny blue to be concerned with such petty issues....... At the end of the day one simple problem - the anc had never run a city let alone a country, and they were not about to listen to the only other people in SA who had.

  • bob.spaps.1 - 2012-10-09 16:18

    you poor people, the good times came to an end when the ANC took over

  • Andrea - 2012-10-09 16:24

    Consumers never benefit, only state coffers. Any statement made to make Joe Soap believe he will save money, short- or longterm, is a lie.

  • steve.ritchie.739 - 2012-10-09 16:30

    Eskom is not blameless. After 1994, the big shots spent very little on maintenance, closed the training schools and took big bonuses for themselves because they believed that they showed big profits. Now we have a neglected grid and millions of people stealing electricity through illegal connections. Stupidity knows no bounds. Get rid of the cANCer before it is too late, or maybe it is too late already.

      janine.grobler.9 - 2012-10-09 16:41

      And the same lack of maintenance and upkeep with our water infrastructure means double trouble.

  • timothy.crowley.96 - 2012-10-09 16:39

    The solution is simple, Im pretty sure that we will get even more than 35 billion if we ask cabinet and MP's to empty out their pockets!

  • olwethu.luphoko - 2012-10-09 18:35

    I'm sure the R231 million planned for the 'Zumaville' will make a difference.

  • eyesears.handsfeet - 2012-10-10 10:26

    Consumers would benefit? I doubt it! (producers could compete to deliver energy at the lowest price - No difference between the service providers MTN, Vodacom, 8ta, Cell C, so why would another "competition" for Eskom be any different? Who's hands are suppose to go into the cooky jar this time for the funding needed as with the E-toll system? The long term planning (of what is really needed in SA) seem to be a fairy tale to those who are actually suppose to be running things and making sure that EVERYTHING WORKS, but alas it remains a fairy tale, as some REALLY do NOT have the abillity to PLAN AHEAD! All the planning seen thus far, was "just to keep the boat afloat, making repairs along the way so that we dont sink completely". Yes this whole SA economic system are sure being made in it's (_) with a lot of help from you know who.

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