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Avoiding an electricity déjà vu

MMEGI EDITOR
Experience is the best teacher, except when the lessons from the experience are forgotten.

Not long ago, the country went through one of its greatest and deepest public service crises, when loadshedding gripped the economy, starting in 2007 and lasting roughly until 2014/15.

Many still remember vividly the uncertainty, disruption and loss caused by widespread, sporadic and unpredictable electricity blackouts that traumatised households and businesses through those years.

We all remember the blame-game that heralded the electricity crisis, after 2008, when government frequently refuted allegations that it had sat on the expansion of Morupule B for years, preferring Eskom imports instead.

In fact, the expansion of Morupule A into Morupule B had first been proposed in 1994 and was rejected as being too expensive. In 1998, when South Africa first warned it would not be able to support exports after 2007, policymakers still kicked the Morupule A expansion down the road, moving at snail’s pace with planning. Morupule B was then initiated at breakneck speed and with the expected consequences.

Were the planning lessons from that period learnt?

If the morass the Morupule B 5 & 6 project finds itself in is anything to go by, the answer would have to be no. As with water, the planning for electricity generation is a visionary affair, requiring long-term projections of demand, which in turn require complex studies around drivers of population and economic growth, industrialisation and others.

This not thumb-suck economics. Very real numbers are required to justify the very real investment

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that must be made to ensure sustainable power supply in the future.

By 2014, when government floated the tender for the expansion of Morupule B (i.e the 5 & 6 project), the move was read by many as a sign that the post-2007 lessons had been learnt.

Instead, that project has been sitting in the water since it was awarded in 2015, with the winning bidders growing increasingly despondent and confused at government’s indecision and mixed signals. Each day, the winning bidders are getting penalised interest against the loans they borrowed for the project and government faces the unenviable prospect of claims being filed against it if it reneges on the deal.

Morupule B 5 & 6 could have been built by joint Japanese and South Korean expertise, the bidders taking the risk of manufacture, design and operation and government’s only obligation being to buy the power from there. Had Morupule B taken on the same model, government would have saved itself the P15 billion it spent on building and operating a still faulty power station.

We cannot afford to return to the dark days of 2007 – 2014 due to indecision. If government does not want to go ahead with the project, let the sustainable alternatives for future demand be clearly spelt out to the nation and investors.

 

Today’s thought 

“The risk of a wrong decision is preferable to the terror of indecision.” 

– Maimonides



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