Dark days ahead for Eskom: power shortages are killing off South African businesses, but the power utility could be the crisis's real casualty..

Author:Nevin, Tom
Position:COUNTRYFILE: South Africa - Economy and the gradual death of the digital video disc market
 
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Mike and Delyse Molfetas are closing down their Johannesburg suburban video store, Red Carpet. The flagging economy and the gradual death of the DVD market were partly to blame, but it was Eskom that delivered the final blow, Delyse says.

"The problem was that people did not know when they would be affected by load shedding and they did not want to hire a movie take it home, be plunged into darkness and not able to play it ...

"We're just one of many stores that are going under."

"It's difficult to understand," her husband adds. "The government goes on and on about the 'vital importance' to economic growth of small businesses, start-ups and entrepreneurialism, and yet it finds it impossible to deliver a decent electricity service, enterprises' life blood."

On 12th March, the utility announced that it had asked four executives, including CEO Tshediso Matona, to step aside pending an investigation.

The parlous state of South Africa's energy sector dominated President Jacob Zuma's State of the Nation address as he sought to calm a jittery electorate faced daily with an off-on electricity service.

The state-owned utility is deep in crisis, with new power stations years behind schedule and billions of rand over budget, and with ageing, badly maintained infrastructure creaking at the seams.

It is not just mom-and-pop shops that are feeling the pinch.

Whitey Basson, CEO of Shoprite, the country's largest supermarket chain, says that day-to-day trading is becoming difficult in the face of routine "load shedding", the euphemism for Eskom's sweeping power outages. "We've got nearly R30om ($26m) worth of generators, but they're not designed to run for 24 hours a day," Basson says.

"And what do I do with my farmers who cannot even water their crops? A lettuce needs water every day and it's all pumped. We can do very little except sell dry goods and stuff that has been pre-produced, but your perishable areas of the business will go to the dogs within 48 hours."

Foreign direct investment has slowed, and the government has revised its GDP growth estimates down from 2.5% to 2% for 2015, and down from 2.8% to 2.4% for 2016.

Stockists of emergency lighting devices, home generators and security companies are among the few businesses making hay. Johannesburg's traffic chaos descends further into bedlam when traffic lights blink off for hours on end. Cape Town is a little better off with some traffic lights having been fitted with solar energy power units and...

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