Anger in South Africa over blackouts; fears for growth

Jan 17, 2008, 17:11 GMT

Johannesburg - Anger was mounting in South Africa Thursday following yet another bout of blackouts that ground businesses in the economic hub Gauteng to a halt and threatening to take the lustre off the country's high growth rates.

The government and state electricity utility Eskom was taking it from all sides after another round of 'loadshedding' - Eskom's term for cutting power to some parts of the country, usually without warning, when demand is too tight.

'South Africa's lack of reserve power capacity has now reached catastrophic proportions and if left unchecked threatens to fundamentally undermine South Africa's future growth prospects,' a spokesman for the opposition Democratic Alliance (DA) railed.

The DA's Hendrik Schmidt was responding to reports in the Star newspaper Thursday that Eskom had asked the government to put all major new industrial projects on ice until 2013, because there was not enough electricity to power them.

'You don't sell what you don't have,' Eskom's finance director Bongani Nqwababa was quoting by the paper as saying.

Among the projects that might have to be put on the back burner, according to Eskom, was the 2.7-billion-dollar Rio Tinto Alcan aluminium smelter the government had lured to Eastern Cape province on the promise of cut-price power.

'Our economy simply cannot afford to chase away investment of this size,' a concerned DA warned, pointing to the country's high unemployment levels - officially given as 25.5 per cent with the real figure thought to be much higher.

Others have questioned the government's generosity with big business on electricity at a time of biting power shortages.

'Why, if Eskom can't supply electricity to the citizens of this country, is it offering foreign companies large amounts of power at reduced tariffs,' environmental lobby group Earthlife Africa demanded to know in a statement.

In chaotic scenes that have come to characterize life in Africa's largest economy, motorists in parts of Johannesburg, Pretoria and other towns were left trying to edge their way willy-nilly through busy intersections after the traffic lights went out.

Citizen newspaper reported that street kids had taken to directing traffic for tips.

Normally bustling shopping malls in northern Johannesburg were quiet at midday as shops and restaurants were forced to shut up shop.

Industry has also been affected, with some factories reporting production stoppages of several hours. Mining giant BHP Billiton said its three aluminium smelters had been affected.

Eskom's troubles stem from years of state underinvestment at a time of growing demand for power fuelled by high growth - a judgement error for which President Thabo Mbeki publicly apologized in December.

South Africa's growth averaged 5 per cent a year between 2003 and 2006 before slowing slightly to a forecast 4.9 per cent in 2007. During that time Eskom's reserves fell to between 8 and 10 per cent, well below its target of 15 per cent.

Although Eskom is now investing 300 billion rand to build new power stations and refurbish old facilities it has warned of shortages for another five to eight years until it restores healthier levels of reserves.

The situation has sparked concerns for the success of the 2010 football World Cup in South Africa, which will be staged during the southern winter when energy shortages are usually at their peak.

'It'll be 'welcome to the Third World Cup',' a businessman in Johannesburg said pessimistically.