Investment gloom as SAfrica enters the 'dark ages'
South Africa was set Monday to ration electricity in a bid to stem a spiralling crisis which has dealt a severe blow to its status as the continent's economic powerhouse.
After mounting anger over daily blackouts which have cost business hundreds of millions of dollars, the government said it was drawing up plans which could see consumers fined if they exceed set quotas.
Nelisiwe Makubane, deputy director general of the minerals and energy department, said the regulations being worked on with the state power utility Eskom could be implemented within three months.
"Once we have received public comments, then the regulator and Eskom will implement those regulations which will include among other things, incentives for people to move to power rationing and also penalties to make sure that people stick to what they are committed to," Makubane told public radio.
Her comments came after Eskom's chief executive was quoted as saying that rationing was being considered and anyone who breached his or her quota could have their power disconnected.
South African President Thabo Mbeki held talks with Eskom's management late Sunday to discuss the crisis, which analysts warn will scare off foreign investors.
Although the blackouts have affected the whole country, the commercial capital Johannesburg has been worst hit and Eskom says it would be foolhardy to attract major industrial projects until the situation has been resolved by the middle of the next decade.
"It's a question of supply and demand. It would be irresponsible now to aggressively pursue energy-intensive businesses," Eskom's finance director Bongani Nqwababa was quoted as saying by the Business Day newspaper.
The blackouts have affected everything from factory production to traffic lights with some estimates putting the overall cost so far at beyond two billion rand (280 million dollars, 200 million euros).
"This situation inevitably reduces the country's global competitiveness as an investment destination, especially since it diminishes South Africa's competitive advantage as a low-cost electricity country," Business Unity of South Africa's chief executive Jerry Vilakazi said.
BUSA's concerns are shared by the main labour federation COSATU, a junior partner in the governing coalition, "It has become a serious national embarrassment and could have a major
impact on economic growth and job creation," said COSATU spokesman Patrick Craven.
The blame has been largely put on the government, with Mbeki acknowledging last month that Eskom's appeals for investment several years back had been rejected.
Newspaper headlines have made uncomfortable reading, with The Times bemoaning "Power Cuts Are a National Disgrace" while The Star -- whose printing presses have been halted several times -- proclaimed: "Welcome to the Dark Ages."
Hendrik Schmidt, a spokesman for the main opposition Democratic Alliance, said a shelving of major industrial projects would be a disaster.
"Such a moratorium could derail a number of huge projects, such as BHP Billiton's expansion of two aluminium smelters in Richards Bay" in KwaZulu Natal province, he said.
"Our economy simply cannot afford to chase away investment of this size as it not only undermines our growth potential but also stymies the much needed ability to create jobs."
Even the ruling ANC party is adding to the pressure, with its national executive committee recommending at the weekend that "government urgently develop a national response plan, whose single-minded focus is to keep the electricity flowing."
But amid the frustration, retailers of rechargeable lights, gas cylinders and generators have been enjoying a sales boom.
