Monday, November 17, 2008

The Electricity Crisis and the Construction Industry in South Africa

Photo Credit: Harraz from Flickr.com

Background and the Forum - Early in 2008 it was announced that Eskom had placed a moratorium on the provision of quotations for new construction projects for a period of 6 months up until the end of May 2008. This moratorium was in respect of all developments requiring an electricity supply exceeding 100 kVa.

The Construction Industry has been meeting with Eskom in this regard at the Electricity Crisis Forum facilitated by Master Builders South Africa (MBSA). The forum is being attended by a range of role players in the construction value chain including developers and other clients, architects, quantity surveyors, engineers, contractors and subcontractors.

Uncertainty around obtaining new electricity supply - Eskom has announced that the process of quoting is now continuing. Quotations would be issued which would reflect the cost of providing new supply and the time frames within which new supply would be provided.

Eskom stressed that this did not mean that construction activity would automatically resume as normal in that certain projects may only be allocated supply a considerable time into the future.

There is considerable uncertainty regarding the criteria for developments to receive supply, Eskom has reached a conclusion that it is not in a position to unilaterally take the decisions as to which projects would receive electricity or not, and has referred this process to government,

This process, as with all of the previous aspects of this crisis, needs to be transparent, clear and well publicised to avoid prejudice as far as possible.

The forum therefore calls all relevant role-players to engage on these and relevant matters to ensure that information is available to those who need it.

Brandon Abdinor
Executive Director

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