The first quarter of 2015 is looking pretty bleak for businesses, in light of an ongoing energy crisis with the country’s sole electricity provider, Eskom. The public utility provider has seen its systems constrained since early November after the collapse of a silo at the Majuba power station in Mpumalanga. The resulting power cuts have hit the business sector hard, severely affecting the operations of companies heavily reliant on electricity usage.
Peter Haylett of the Cape Chamber of Commerce suspected 2015 would hold similar problems for businesses, particularly in the first quarter of the year. With Eskom still needing to conduct maintenance at the station, the possibility of more blackouts was rife. Most affected by this would likely be smaller businesses.
“Smaller businesses are affected by instability. If you find that you are cooking or baking and the electricity goes off, you’ve got a serious problem. If you are a hairdresser and your electricity goes off, you can’t operate,” he explained.
The crisis may also have detrimental effects on those seeking employment, with many businesses expected to be hesitant to employee new staff whilst profits are stalling. On a similar note, job losses could potentially be a problem in the New Year, at least until businesses are once again on ‘safe ground’.
Despite the crisis, many companies have received somewhat of a reprieve during December, as many consumers have upped their spending during the festive season as a result of year end windfalls.
“Normally at this stage of the year, a lot of retailers rely on this very short period. If you look at Cape Town which is very full (this time of year) as far as tourists are concerned, I think there is a benefit from that,” he said.
Whilst many businesses have opted for alternative forms of energy like generators and solar power, Haylett said this was helping only until a certain extent. In the case of these alternative sources, businesses would need to spend substantial amounts of money to get these systems up and running.
“If you’re doing alternative energy in the form of solar, that only works when the sun is shining. But it does make a difference. Many factories and offices are doing that at the moment, and their payback is roundabout seven years,” he stated.
With the first quarter of 2015 expected to be difficult on many businesses, he said they would have to reassess during the New Year what the forecast would be like for the rest of the year. VOC (Mubeen Banderker)