South Africa Blackouts Snarl Traffic, Shut Cartier, Vex Mbeki

2008-01-23 19:03 (New York)

Jan. 24 (Bloomberg) -- Workers at Johannesburg's Tre Gatti Cucina restaurant spent peak business hours last week wiping down tables and folding napkins by candlelight, their kitchen idled by South Africa's worst-ever blackouts. With the country's power monopoly, Eskom Holdings Ltd., predicting shortages until at least 2013, the six waiters and kitchen workers may soon be out of work. ``If it continues like this we will have to sell,'' said Dee Kroon, who opened the Italian restaurant in the Johannesburg neighborhood of Craighall Park in 2005. ``Who is going to buy a business if there are power cuts all the time?''

Africa's largest economy is being threatened as a lack of new power plants and increased energy demand have conspired to reduce power to shops and cafes as well as the mines and smelters of companies such as BHP Billiton Ltd. and Anglo American Plc. The shutdowns mean entire regions of South Africa are dark for up to five hours a day, triggering traffic jams as street lights shut down. ``Its having a very serious effect on business,'' said Bill Lacey, an economic consultant at the South African Chamber of Commerce and Industry. The group has called for lower duties on imports of generators for small businesses. The situation is also riling commuters. Last week some trains were torched by rioters at a station near Pretoria, the country's capital, after a blackout stopped services.

Growth Threat

The outages may scupper the government's aim of boosting economic growth to 6 percent, the level it says is necessary to cut a 25.5 percent jobless rate. On Jan. 21, Eskom brokered an agreement ``in principle'' to cut power supplies to the biggest users, including mining companies BHP Billiton and Anglo American by as much as 15 percent. ``That's not a joke. You are taking 10 to 15 percent of your production away,'' said Jasper Pieters, operations director at Mitsubishi Corp.'s Hernic Ferrochrome Ltd., which uses 200 megawatts of power, enough to supply 200,000 US. homes.

``When will power be restored? We don't know. If that's the case then I am afraid it's going to go to job cuts.''

South African President Thabo Mbeki in December apologized to Eskom for failing to heed the utility's call in 2000 to start increasing generation capacity as the economy grew and it extended power to poor townships built under apartheid. Plans to sell part of Eskom to private investors and invite companies such as International Power Plc to develop plants weren't implemented after Enron Corp.'s bankruptcy suppressed the appetite for power investments.

Eskom Gap

``Privatization and independent power plants were the flavor at the time,'' said Bongani Nqwababa, Eskom's finance director. ``The view was that private power companies would build a power station, and they didn't.''

In 2000, Eskom had a so-called reserve margin, the gap between generation capacity and energy use, of about 30 percent. That has shrunk to less than 10 percent, leaving it vulnerable to blackouts when there are spikes in demand. About 20 percent of Eskom's capacity is currently unavailable due to maintenance and a series of plant breakdowns. Plans to re-open three coal-fired plants and build two diesel-fired plants won't meet increasing demand, which jumped 5.6 percent in a single month last year.

Generator Sales

Instead, businesses and individuals are turning to diesel-generated power. The country's most expensive shopping district, Sandton City, is considering spending 80 million rand ($11 million) on a generator to keep the doors open at retailers such as Cartier, MontBlanc and Accessorize. Several of the shops shut last week because of power outages.

In the third quarter of 2007, South Africans imported 44,590 generators, according to the South African Reserve Bank. That compares with 790 in the third quarter of 2003. After a four-year delay in approving new power plants, Eskom in 2004 began a 300 billion rand expansion program. The first major new plant won't begin producing power until around 2012.

The state company, which supplies 95 percent of domestic electricity, plans to double peak capacity to about 80,000 megawatts by 2025 by building coal and nuclear power plants and purchasing hydropower from other countries. ``Government has been very slack, there is no question that it is going to slow down growth,'' said Iraj Abedian, chief executive of Pan African Investment & Research Services. ``It's a disaster.''

World Cup Looms

The crisis comes as South Africa prepares to host the soccer World Cup in 2010, an opportunity to promote the country as a tourist destination. Power outages have disrupted a five-nation field hockey

tournament being held this week in Potchefstroom, about 100 kilometers southwest of Johannesburg. More than 100 players from Germany, Australia, the Netherlands and Spain had games rescheduled to avoid blackouts.

Although World Cup games may be guaranteed electricity supply, closed restaurants and traffic jams will do little for the country's image at an event seen by some 1 billion television viewers. For restaurant owner Kroon, opening for business remains a gamble. ``Tonight I have bookings,'' she said. `I'm not sure I should have taken them.''

-- Bloomberg.

http://www.bloomberg.com/apps/news?pid=20601085&sid=ag8DXEwE8GaI&refer=europe

read that storry in the paper, felt really bad.wanted nigeria to have all the bad records in africa

I thought you would wish Nigeria better than that! Little wonder we are where we are. Nigerians ought to think good thoughts about our country. You are what you think you are!

another evidence of the black man's inability to run a country.

The predictable effects of over-regulation and monopolies and African mentality.

another evidence of the black man's inability to run a country.

You need to withdraw this statement before i descend on you.

So why did Mbeki not heed an expert's advice on the need to build new power plants. Yes it is an evidence of a black man's inability to run a country.

hotfunmi:


You need to withdraw this statement before i descend on you.

the truth is bitter but t shld be said anyway

Somebody predicted recently that SA will go the way Zimbabwe went.
What's really the problem of the black man?

Ohh, South Africa; my only remaining African pride .

Here is a reply to bawomol (m), from the other topic of nigeria engineers, 
You do not have to lie to make a point engineering school in North america is just 4 years,  anyone can do a google search, 

You list several america university,  I need to ask a question  who rate this so call America university high ?? Are they not American what do you expect?? do you expect them to claim that their mama sweet no good. So that the international community would stop sending money and children to them,  How do you think they make money,  from propaganda that they have the best universities in the world , which is not truth. They rate this universities with bias standard.

Look China have built 30 nuclear power plant in the last 30 years. The USA have not built one in the last 30 years. There use to be a time when the world is all about USA , it is no more, wake up. That is what Obama, clinton and others are trying to tell you.

This may shock you,  i do not know now what the employment situation in Nigeria is. There use to be a time, when graduate from USA universities in Nigeria could not get a job, because of lack of performance. USA degree were not regarded as degree. I do not know what it is now in NIGERIA. Then your chances of getting a job with a USA degree is close to 0 based on past performance of Nigerian who have gone to school in the USA. This degrees are either refered to as Chicago or Toronto degrees. What they mean is sub standard.  When you say Chicago or Toronto degree , everybody in Nigeria understand what you are saying.

Never knew there's NEPA in South Africa! thougth it would be a diff power company!

hotfunmi:


You need to withdraw this statement before i descend on you.

hotfunmi:


You need to withdraw this statement before i descend on you.

Why should the statement be withdrawn? It is the truest sumation of African affairs extant bar none. We are all proud to be African especially Nigerians. But devout patriotism should not be a deterent to reason! The truth is the truth, and the sooner we learn to identify and  accept it, then sooner we can all work on our iniquities.

mr oyb pushing cacons website to my faces. My asking price is high , in the millions in naira. If you get that kind money. I dey here. I do not come cheap.

The one way I go come to nigeria, na because Oga Yar Adua invisit me or something big. You know say I don cause IBB well well. I know want him to send me letter bomb when i dey Nigeria. Or you send me letter with IBB signature say , he no go send me letter bomb.

http://.COM

Its a pity South Africa is in this state.This is clearly a result of under-investment,poor planning and lack of competition in the power sector.

They still have a 7% reserve margin(the percentage by which capacity outstrips demand-western average is 15%) but many of their plants,due to poor maintenance,are undergoing repairs at the moment.

They have started the tasks of rapid investments in generating capacity but there could still be shortages up to 2011.

The lesson we can draw from this is the need to deregulate the power sector.

i tok these things only happen in naija. Thank God we are used to it while we hope to improve. For the hustlers especially my igbo brothers, this is a bisuness opportunity; importing generators into South Africa. i pity them sha: world cup dey come.

Ghana also had black out during this ongoing nations cup. Africa, my africa

nigeria1:

Here is a reply to bawomol (m), from the other topic of nigeria engineers,
You do not have to lie to make a point engineering school in North america is just 4 years, anyone can do a google search,

You list several america university, I need to ask a question who rate this so call America university high ?? Are they not American what do you expect?? do you expect them to claim that their mama sweet no good. So that the international community would stop sending money and children to them, How do you think they make money, from propaganda that they have the best universities in the world , which is not truth. They rate this universities with bias standard.

Look China have built 30 nuclear power plant in the last 30 years. The USA have not built one in the last 30 years. There use to be a time when the world is all about USA , it is no more, wake up. That is what Obama, clinton and others are trying to tell you.

This may shock you, i do not know now what the employment situation in Nigeria is. There use to be a time, when graduate from USA universities in Nigeria could not get a job, because of lack of performance. USA degree were not regarded as degree. I do not know what it is now in NIGERIA. Then your chances of getting a job with a USA degree is close to 0 based on past performance of Nigerian who have gone to school in the USA. This degrees are either refered to as Chicago or Toronto degrees. What they mean is sub standard. When you say Chicago or Toronto degree , everybody in Nigeria understand what you are saying.

I find your post interesting. I do have tons of questions but I will start with a few for you to answer for me @Nigeria1


1) When in Nigerian history was it hard to get a job in Nigeria with an Degree from an American school??

2) How did you figure that the reason why America has not built any nuclear plants in so many decades is related to Engineering school graduate standards??

3)When was this Toronto/Chicago degree era and how did you decide it meant "substandard"

4) There have been more and more Chinese students in american schools over so many decades now, does that then mean that all the 30 nuclear plants, as you claim, are also sub standard,

Generator business go pay for that side now o! nna this is business!!!!

nigeria1:

Here is a reply to bawomol (m), from the other topic of nigeria engineers,
You do not have to lie to make a point engineering school in North america is just 4 years, anyone can do a google search,

You list several america university, I need to ask a question who rate this so call America university high ?? Are they not American what do you expect?? do you expect them to claim that their mama sweet no good. So that the international community would stop sending money and children to them, How do you think they make money, from propaganda that they have the best universities in the world , which is not truth. They rate this universities with bias standard.

Look China have built 30 nuclear power plant in the last 30 years. The USA have not built one in the last 30 years. There use to be a time when the world is all about USA , it is no more, wake up. That is what Obama, clinton and others are trying to tell you.

This may shock you, i do not know now what the employment situation in Nigeria is. There use to be a time, when graduate from USA universities in Nigeria could not get a job, because of lack of performance. USA degree were not regarded as degree. I do not know what it is now in NIGERIA. Then your chances of getting a job with a USA degree is close to 0 based on past performance of Nigerian who have gone to school in the USA. This degrees are either refered to as Chicago or Toronto degrees. What they mean is sub standard. When you say Chicago or Toronto degree , everybody in Nigeria understand what you are saying.

nigeria1:

mr oyb pushing cacons website to my faces. My asking price is high , in the millions in naira. If you get that kind money. I dey here. I do not come cheap.

The one way I go come to nigeria, na because Oga Yar Adua invisit me or something big. You know say I don cause IBB well well. I know want him to send me letter bomb when i dey Nigeria. Or you send me letter with IBB signature say , he no go send me letter bomb.

http://.COM

Did you read the topic of the thread?

romeo:

Did you read the topic of the thread?

It looks like he was posting in a state of drunken stupor. Neither his posts nor the people he is referring to have anything to do with this thread

romeo:



Did you read the topic of the thread?

Romeo Please ask him. i think nigeriaone cum1 is kolomental. Pardon me if u are not

4play
Perhaps you do not know the guy. If you do, you will not be surprise.

Olumide7:

Generator business go pay for that side now o! nna this is business!!!!

Right on!!!

High demand and less supply I feel they shd have long term projections b/c of the rapid way their economy is developing. Anyways, I truely wish them well and pray they resolve the crisis soon cos it wil not be good for their economy.

this guys are going to host the world cup in 2010 they better get there acts together 2yrs is not that far away

@poster,
is the power agency in south africa also called 'NEPA'?

Mbeki is at fault for this: He delayed investment that Eskom (the SA power utility) required to fund power projects by 5 years, only reluctantly realising late in 2006. . .given the time lines required to bring new plants on stream, the current shortages were inevitable.

The firm is now resorting to demand-side management to remedy the situation as a short term solution.

Once again, this shows that the so called 'private generation' cannot sufficiently meet the needs of power, even in highly developed South Africa, because the quantum of investments needed are often beyond what any private investor will stake in that market.

@ Kobo nigeria1 is babbling a bit

all I can tell you is that the Chicago/Toronto saga come from 2 incidences

1. Ex speaker of the house of reps was discovered to have forged a Toronto degree certificate in 2000 and got impeached due to that

2. Ex governor Tinubu had a big hassle with his opponents since his INEC form (filled by a friend who made a mistake) showed he graduated from Chicago State University when all he did was 'audit' a course at the institution

hence some N/A grads were referred to as Chicago/Toronto whenever their qualifications appear dubious.

i never knew we have exported NEPA,
i only thought the only things we have exported to south africa is fraud and of course ballot paper printing (by Iwu-INEC Chairman)?!

hi just wantd u all 2 knw dat am a new member n am proud 2 b 1 cos it makes me feel close 2 home cos i dont base in 9ja nomore,ready 2 welcome me,

now 2 d topic,never there nepe is in sa, just knwin

@debosky

The regulatory environment provided ESKOM with a virtual monopoly that impeded private investment.If the Govt had given the green light to private investors,while deregulating the sector,we can talk of "failure of private investment".This is however far from the case in S.A

The black man always includes sentiments when doing things and that is our major problem. How else can you explain the hiring of Berti Vogts as our coach.

i hope the SA president does not have a nigerian as his special adviser on power/energy matters.

or how do you explain this.its gonna slow down their economy.i better inform my 'NNA' asap or better still form a joint venture.
more issues affecting the hosting of the world cup,