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Thread: The economic consequences of load shedding

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    Site Caretaker Dave A's Avatar
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    The economic consequences of load shedding

    South African load shedding has just got to be hurting our economy.
    I'll comment on some of the economic impact we're experiencing later, but here are some views from a foreign investment point of view.

    Eskom's call for the government not to advertise South Africa as an investment location with cheap electricity does not mean the country is closed for new business.

    This is the view of Iraj Abedian, the chief executive of Pan African Advisory Services, who said yesterday: "What the call does is open up options for investors and give guidance.

    "It says all those who want to invest in South Africa should look at industries with less reliance on energy, among other things. When investors come here, they need to reprofile the industries they want to enter."

    Tony Twine, a senior economist at Econometrix, said Eskom's advice simply meant that low-cost power was no longer a positive attribute, as it had been in the past.

    He said it was difficult to say whether this would affect foreign direct investment because it was unclear how attractive low-cost power had been when investors made their decisions.

    "Cheap labour and property could be among the attractions that would continue to woo foreign investors," Twine said.

    Mario Galletti, a trade analyst at the Italian Trade Commission, said the economic effect could be huge, as informal discussions in lifts and dinner parties showed that concern was mounting.

    "I think the reason we have not had a formal complaint from [business] chambers is because people thought the problem would be temporary," Galletti said.

    "But ... because it will last for at least another three years, people back home would treat power cuts the same way they do crime.

    "They would only ask how we are surviving in South Africa and would not simply disinvest."

    A UK Trade & Investment official, who did not want to be named, said that though the power cuts would not cast South Africa in a good light, they would not deter firms from investing because they always believed the issue would be resolved sooner rather than later.
    from Business Report here
    I'll make a post on how load shedding is affecting our business later when I've got a bit more time.

    In the meantime, how is it affecting your business?
    The trouble with opportunity is it normally comes dressed up as work.

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    We are right now in the process of shifting what would have been an employee expansion budget to pay for additional UPS's! Delaying expansion by about 6 months! I have been able to work for exactly 4 business days this year after Telkom went down, Eskom went down, my ISP went down and I eventually went down with anger management problems!!!!!!!
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    Debbie
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    From reception to management training, assertiveness, accountability or interviewing skills, we have a wide range of training workshops available for you!
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    Moderator IanF's Avatar
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    We've only had 1 power failure so far, but if it comes and there are jobs running on the copiers then you have problems especially if you are doing a run of say 200 manuals. The printed manuals have to be counted and then restart. We also have to sometimes manually wash the ink rollers on the press as it is not good to leave them inked overnight.
    Only stress when you can change the outcome!

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    Site Caretaker Dave A's Avatar
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    Eish, Debbie. And I thought we were having fun and games!

    On our side we've had 8 hours of power shedding this week (so far) for our office. Future power shedding is now covered for the office - we've got the backup generator installed at a cost of R7500.00 give or take a few cents. So from here on in any outages will cost us around R25.00 per hour between fuel and maintenance costs of the generator (at current fuel prices).

    From here it is the impact on our field staff that is going to be the headache. Arriving at a client's house when the electricity is off is somewhat of a problem for the electrical company.

    Durban has been broken into 6 blocks of 2 hours each for load shedding purposes. In theory this means there is a 1 in 6 chance of us arriving at a client's house to find no electricity. It's too early to say what the actual stat might end up being, but I've asked for the issue to be tracked.

    As a cause of unnecessary wastage and expense, this one is going to add up.

    On the upside, we got 4 enquiries to install backup generators today
    The trouble with opportunity is it normally comes dressed up as work.

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    Platinum Member Chatmaster's Avatar
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    A guy was interviewed yesterday on 702, he lost a R10mil deal because of the load shedding,... I decided, I have nothing to complain about...

    Dave you are highlighting a very important point. The load shedding will create a snowball effect on our businesses. I was at a client yesterday, he had 3 workshops going when the first power failure hit. There was in total over 100 delegates, all employees that took time of work to attend a workshop. They were effectively interrupted for 2 hours. The problem this created is the following. Here was over 100 employees, not at work, that effectively had a 4 hour interrupted workshop, which meant they lost half the day's training. The chances was good that they would have to return the next day to continue their 1 day workshop. That is if my client had the venue available to do so. The point I am making is that the snowball costs is very high. This was at one single venue!

    Employees are effectively spending 1 hour longer in traffic in Jhb. I missed an appointment today, simply because I was stuck in traffic for the entire duration of what the client had available to see me. Traffic lights was out and I was stuck. My one friend had the exact same problem, difference was he was stuck in a lift. Same happened to another friend being stuck behind a magnetic door in a shop for 2 hours, the toilet was outside btw.

    Shacking head in misery.

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    There are consequences that you would not ever take into account!

    Long story: Short version.
    Bank fraud - all linked accounts. Over R100,000 involved.
    Try to stop all transactions; Bank require S.A.P. case number.
    Police unable to give case number - no electricity, have to wait until power is restored.

    Lack of constant supply of adequate electricity is not a threat to the stability of our businesses - it is a fact!

    What about the economic viability of future developments in the knowledge that there will be insufficient power available: First priority will be the need to provide your own power, if that is a feasible cost, then the feasibility of the actual development next?
    Cost will surely rule out future developments?

    Should a development such as the Gauteng Train continue, surely this will draw a substantial amount off the grid?

    Plans for residential developments are not being passed as electricity cannot be supplied!

    I have concerns about "abuse" of power with regard to which areas are selected for power shedding, (Eskom offices are never without power during working hours?)
    The potential for corruption in regard to obtaining "protection" from shedding exists.

    Yvonne

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    Apologies, see this is well covered in another post, had not read all my unread posts, and should not have posted so quickly!
    Yvonne

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    Site Caretaker Dave A's Avatar
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    Quote Originally Posted by Yvonne View Post
    Apologies, see this is well covered in another post, had not read all my unread posts,
    There was bound to be some cross-over, Yvonne. I don't see any problems with that.
    The trouble with opportunity is it normally comes dressed up as work.

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    to give you an idea...i go to site because of an electrical fault i get to site started tracing the fault power goes off so i leave site drive from westville to customer next to gateway...e/l has blown form lightning...get there no power replace the e/l unit and switch back on and hope it works...off to sarnia to work at a customer no power...so now i have to plan my day and visits around load shedding...cut back on staff because i dont need people sitting around on site waitng for power.

    companies are suffering...i have a customer who wants to put in a generator...the cost to keep the plant running... 1.8 million excluding installation and waiting period 4 months...more than 50 staff sit every day for 4 hours and the machines loose production of 6 hours because of the time required to setup after the load shedding takes 1 hour the company is running 24/7...and you think you have problems.

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    Site Caretaker Dave A's Avatar
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    Add replacement of maliciously damaged property to the cost.
    Three trains were set alight in Pretoria by angry commuters, police said on Friday.

    Captain Prince Mokhabela said the first train was burnt in Pretoria North at 6pm.

    "There was a power failure and commuters got angry as trains were not moving. People also burned trains at Walmerton and Winterveld," he said.

    No one was injured and no arrests were made.

    Police are investigating cases of malicious damage to property.
    full story from M&G here
    The trouble with opportunity is it normally comes dressed up as work.

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