Disaster Plan Draws Skepticism in Energy-Starved South Africa
(Bloomberg) -- South Africa is drawing skepticism over its plans to declare a state of disaster to help tackle crippling blackouts, with critics arguing that the measure will undermine spending controls and isn’t the solution to the nation’s energy crisis.
Most Read from Bloomberg
Porsche Blunder Puts $148,000 Sportscar on Sale for Just $18,000
Plenty of Americans Are Drinking Bleach, Still for Sale on Amazon
National Archives Releases Records Tied to Trump Classified Documents
Rolling power outages, known locally as loadshedding, have been instituted since 2008 to protect the electricity grid as state power utility Eskom Holdings SOC Ltd. fails to generate enough energy to meet demand from its old and poorly maintained coal-fired plants.
On Tuesday, the governing African National Congress called for state-of-disaster laws to be utilized to end the outages by year-end. More details may be announced after a cabinet meeting that begins Thursday, or when President Cyril Ramaphosa delivers his state-of-the-nation address on Feb. 9.
“Existing legislation and institutions, if used in good faith, provide all that is necessary to get over loadshedding as fast as reasonably possible,”said Hilton Trollip, an energy research consultant and fellow at the University of Cape Town. “Huge risks” will accompany the imposition of a state of disaster and the government needs to justify why existing laws are inadequate, he said.
While it’s unclear what government measures would follow such a declaration, Eskom has long requested truncating procurement rules in order to speed up delivery of spare parts to fix its plants. Energy Minister Gwede Mantashe has raised the option of securing electricity from floating gas-fired plants if legal obstacles are removed. Bids by Turkey’s Karpowership to supply South Africa have made slow progress because of lawsuits and environmental challenges.
Read more: South Africa Considers State of Disaster for Energy Crisis
The energy shortages have hobbled Africa’s most industrialized economy, with the central bank estimating they will shave an estimated 2 percentage points off output growth this year. Efforts to improve the performance of power plants and bring new capacity onto the grid have fallen short, and with elections looming next year the ANC is under mounting pressure to turn the situation around.
A state of disaster was last imposed in March 2020 in response to the coronavirus pandemic, enabling the government to fast-track spending and cut red tape. It later emerged that public funds had been abused, tender processes bypassed and that ANC politicians were among those who benefited from questionable contracts.
That experience will undermine support for implementing similar dispensations and the additional measures don’t appear to be needed, said Happy Khambule, energy and environment manager for lobby group Business Unity South Africa.
“Many policy instruments that would lead Eskom onto a sustainable path require implementation, which is unfortunately sorely lacking,” he said. “The correct path to end loadshedding is to leave Eskom to do its job without further interference,” increase energy generation, give incentives to individuals and businesses to generate their own power and have a consistent demand-side electricity management program, he said.
Read more: Why Blackouts Are Still Crippling South Africa: QuickTake
The ANC’s plans do have backing from the Congress of South African Trade Unions, the country’s biggest labor group and a member of the nation’s ruling alliance.
“A state of disaster will send the message to society that government is treating this crisis with the urgency it requires,” it said in a statement. “It will concentrate all of government’s attention and resources to stabilizing and rebuilding the grid and providing government and Eskom with the necessary powers and tools to end loadshedding.”
Most Read from Bloomberg Businessweek
A 3D Printer Isn’t Cool. You Know What’s Cool? A 3D-Printing Factory
A $500 Million Bet on Reinvigorating Japan’s Aging Ski Industry
©2023 Bloomberg L.P.