Broken Promises Fuel South African Anger Over Power Cuts

Rotating power cuts are roiling South Africa once again and President Cyril Ramaphosa’s administration is taking the heat for them.

Ramaphosa has given assurances that the government will fix Eskom Holdings SOC Ltd., the troubled state utility that supplies about 95% of the nation’s power, since 2015 when he was deputy president. While the company’s management has been overhauled, it’s struggled to improve the reliability of its old and poorly maintained plants.

Eskom maintained power cuts through the week to avoid a collapse of the grid after several generating units broke down. Its executives have warned that electricity supply will remain unreliable until it fixes defects at new plants and addresses a maintenance backlog.

The utility also blames “apathetic behavior” by some management staff for contributing to the outages. Eskom Chief Executive Officer Andre de Ruyter suspended managers at two power stations pending disciplinary inquiries and interventions at two more are ongoing, the utility said on Friday.

Mineral Resources and Energy Minister Gwede Mantashe has faced criticism for failing to implement plans to address the nation’s energy crisis, including seeking bids for new renewable-energy projects. Plans to buy emergency electricity and relax rules to make it easier for companies to generate their own supply have also proceeded at a leisurely pace.

“You’re all talk and no action,” Kevin Mileham, energy spokesman for the main opposition Democratic Alliance, said in an open letter to Mantashe. “As we sit here in the dark again, minister we have to ask: where is the sense of urgency?”

What Bloomberg’s Economists Say:

“The single biggest risk to South Africa’s economic outlook remains the availability of electricity. It’s a binding constraint that continues to hold back productivity and investment growth. Without it, the country’s growth potential will remain stuck at around 1%, even if progress is made in other areas.”

--Boingotlo Gasealahwe, Africa economist. Click here for full INSIGHT.

Broken Promises Fuel South African Anger Over Power Cuts

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