‘Plug in private sector power’

Tafadzwa Chibanguza, COO of the Steel and Engineering Industries Federation of Southern Africa (Seifsa), says the government needs to jettison its ideological hangups and open the floodgates to allow speedy and direct private involvement in solving the energy crisis.

“Open up the floodgates. All the way. It’s the only solution we have right now. The incentive for companies to come in and help is not profiteering, it s sheer survival.”

’Offers from Seifsa and other business organisations to assist with technical, electrical engineering and financial skills have been on the table for at least two years but the state “hasn’t picked them up”, he says.

The only structure with the clout to bring in the private sector on the scale required is the interministerial National Energy Crisis Committee (Neccom) which is located in the Presidency, but it is moving far too slowly given the urgency.

“The speed at which things are moving leads one to conclude that they’re still holding on to their old ideological position. But we’re already off the runway in terms of being in crisis mode, and crisis mode dictates that we do things differently. Put aside ideological positions.

“The current command approach where you close out the private sector has not worked. Now we have a crisis of such magnitude that it absolutely demands that we do things differently.”

Had the state been more receptive to private sector offers of assistance “we would likely not have found ourselves this far down the road in terms of the lack of energy availability”.

The government is more open to these offers now, he believes.

“I think the extent of the crisis has woken them up to the fact that the country is burning and they need this assistance.”

But there is an urgent need for Neccom to co-ordinate all the private sector offers of assistance, and this is not happening.

“You’ve got offers from Business Unity SA, Minerals Council SA, Seifsa etc, but co-ordinating these offers is crucial, and only Neccom can do that.”

At the moment offers of assistance “might land anywhere — at the department of trade, industry and competition, the department of minerals and energy, the Presidency, even the department of public enterprises. There’s no evident co-ordination and often as a result no practical outcome.”

He cites bid window 6 of the government’s renewable energy independent power producer procurement programme as a classic example.

Bid window 6 initially targeted 2,400MW. President Cyril Ramaphosa then announced this would be lifted to 4,200MW. The private sector responded enthusiastically, with bids of 9,600MW, only to learn that the transmission system couldn’t handle anywhere close to that. In the end a disastrously insufficient 860MW was issued.

“That is just one classic example of the lack of co-ordination between what is announced and what is practical.”

Seifsa represents 1,250 companies in the metals and engineering industry, which employs 371,000 people and accounts for 3% of GDP.

Both downstream and upstream companies in the industry are being hammered by rolling blackouts, he says. Downstream producers at least have the option of alternative sources from independent power producers.

Except that these alternative sources are not materialising fast enough for businesses battling to survive, because of the government’s failure to make it easier and quicker for IPPS to come onto the grid.