Load-shedding blow to festive profits
● Cash-strapped businesses, trying to claw back some profits during the festive season after a brutal year, have been hardest hit by this week’s load-shedding.
The South African Chamber of Commerce & Industry’s CEO, Alan Mukoki, said Eskom’s lack of reliability has severely hamstrung businesses and is a chief cause of the economy’s contraction.
“This is the festive season, a time when retailers are trying to ramp up sales after a slow year, and now they cannot operate because there is not a reliable supply of electricity,” he said.
The loss of power also means businesses in the production sector are hit with penalties because they cannot meet deadlines.
“Eskom needs to make the difficult decisions and stop waiting for all of the social stakeholders to be aligned. They need to seriously deal with the issue of labour efficiency and take the plunge, because this problem is critical,” said Mukoki.
Business Unity SA CEO Cas Coovadia said the impact is particularly hard on mediumsized businesses.
“Larger businesses have a way to mitigate these factors, but for the average business a generator may not be an option.”
He said 2019 had been a tough year, with many smaller businesses “struggling to keep their heads above water”, and weak economic growth of 0.1%.
“Retailers and others are looking forward to a bumper season. Consumers are strained, but they will spend more in the festive season, which can help business owners. But if you’re a little restaurant or business and you have no lights, it affects your business,” he said.
Sean Roberts, who owns three restaurants and function venues in Durban — Unity, Café 1999 and S43 — said load-shedding took him by surprise on Thursday. “The moment the power goes off, our tills can’t keep track of the tabs of 200 people in the venue, so
when you cash up, you’re always short after load-shedding.”
Roberts said that on Friday he brought in a generator for a private daytime function, which cost about R8,000 for a single day, a hefty addition to his monthly costs.
David Field, who runs a bar and restaurant, Dropkick Murphy’s, in Florida Road in Durban, said that during the festive season he hopes for an influx of customers, and that load-shedding cuts deeply into profits. “It’s a nightmare. We have a generator, but it’s currently not working, so we have to try and keep our fridges cold with ice, bring out the candles and keep an eye on customers when our tills go down,” he said.
“You feel helpless, because you work the whole year and you hope that December is going to be busy, but then this happens.”
Poorly planned maintenance and old infrastructure plunged SA into stage 4 load-shedding this week. Rain in Mpumalanga is also adding to the woes, with wet coal said to be unfit for use in power stations. This meant up to 4,000MW — just under 10% of Eskom’s nominal capacity — needed to be cut from the national grid.
The power utility switched from stage 2 to stage 4 load-shedding on Friday. After initially saying it hoped that the grid would stabilise by 6am on Saturday, Eskom reverted to stage 2 yesterday, saying this was necessary to “cater for further trips and to create capacity to replenish water reserves for our pumped storage schemes”.
Yesterday Eskom said it had made some progress in reducing the unplanned breakdowns: “There is also an improvement in managing coal handling with regard to wet coal, with only one station experiencing coal-handling problems as a result of the incessant rains.
“We continue to utilise diesel and water resources at our opencycle gas turbines and pumped storage schemes respectively, to supplement capacity.”
It said load-shedding would continue until 11pm last night. Minerals SA, formerly the South African Chamber of Mines, said load-shedding — especially for protracted periods — severely affected mining operations across the county. Spokesperson Alan Fine said when the power grid was critically constrained, Eskom issued notices to mining operations to scale back their use of power.
“Moreover, mines have to shut down metallurgical plants and stop processing the ore, and that has a considerable impact on output and production.”
As another SOE, South African Airways, went into voluntary business debt rescue this week, the SACP expressed disappointment, saying it would have preferred a state-led turnaround process.