Johannesburg needs R800m to power up

Posted On Wednesday, 19 January 2005 02:00 Published by eProp Commercial Property News
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Government considers massive bale-out to end blackouts in SA's industrial hub

Mbhazima ShilowaCape Town Government is considering a once-off major capital injection into Johannesburg's dilapidated electricity infrastructure, which has been plagued by escalating blackouts.

The city experienced a series of outages over the festive season, affecting businesses mainly restaurants negatively.

The minerals and energy department's chief director of electricity Ompi Aphane said yesterday talks between his department, national treasury and the provincial and local government department were taking place to deal with the issue.

He said he hoped that an initiative would be launched this year, but cautioned that there were many competing claims on the national budget and that the project would have to be evaluated alongside other priorities.

Aphane said after a briefing to Parliament's minerals and energy affairs committee yesterday that a minimum, once-off sum of R800m was needed to invest in electricity infrastructure in Johannesburg to stop the blackouts.

Power failures in the country's industrial heartland were a source of great concern to government, he said, because of their economic effect and threat to investment.

A department study found that Johannesburg would need R2bn over five years as a "first prize", but a minimum R800m once-off investment would get the electricity network to the right level.

To deal with the problem in all of the big metros would cost R3bnR4bn, Aphane said.

Johannesburg's problem was the most serious as its network was very old and supplied major industries.

Aphane said the blackouts in Gauteng were caused by a lack of investment in electricity networks, and not by demand-supply disparities of the kind that lay behind ongoing electricity failures experienced in California after it privatised its electricity networks.

A percentage of the electricity tariff paid by consumers was meant to be used for maintenance, but municipalities used this money for their other services instead, he said.

The municipalities claimed that the money allocated them by national government each year from the national budget was not enough for them to perform their functions.

Aphane said that national government could not force local governments to invest in their infrastructure, because they were constitutionally independent.

Comments made repeatedly by Aphane during his briefing suggested the constitutionally entrenched independence of local government was seen by the minerals and energy department as an obstacle to the effective implementation of government policies in many areas.

Aphane said a co-operative approach would have to be adopted to sort out the blackout problem.

A capital grant was required, as tariff-generated investment income would take too long to accrue.

African National Congress MP Ismail Mohamed was critical about "all the passing of the buck" over the blackout problem.

Gauteng premier Mbhazima Shilowa blamed Eskom, and antiquated equipment inherited from the apartheid regime was also cited as a cause. But, Mohamed said, municipalities should have invested in maintenance a long time ago.

Last modified on Monday, 04 November 2013 12:39

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