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Audit of South African utilities cause for concern

The National Energy Regulator of South Africa recently released an audit of South Africa’s utilities in order to assess at a high level the condition of substations and the network, to determine the effectiveness of the maintenance plan development and execution as well as to determine the effectiveness of the refurbishment and expansion plans development and execution and the effectiveness of operation of the networks. It makes for fascinating reading and makes several findings. It found that the networks in the Metros have been well designed and installed and display a high level of supply security, but that the lack of investment over the last number of years is now evident. The loss of skilled staff was also a concern. It found that the smaller municipalities are generally in poor shape and cannot and often do not deliver the quality of supply required of them. The networks in the smaller municipalities are reported to be in a poor state of repair and there are some instances where the basic contingency requirements are not met. There are very few formal systems in place for the management of the maintenance process and more reliance is placed on the individual engineers and technicians for the decisions in this regards. It concluded that the refurbishment backlog as at the end of 2005 for utilities audited is R 431 million (US$ 61 million) and that this figure grows each year that no refurbishment takes place. The estimate for the average requirement to maintain the present service level in future is R 422 million (US$ 60 million) annually, to which the R 431 million must be added.

As one of the most electrified countries on the continent, South Africa is now having to address its generation shortage and rolling blackouts, and one has to wonder how utilities across the continent can play “catch-up” with regards to their own deficiencies. Certainly, creative solutions are called for, but so is capital and investment. From a perspective of corporate governance and strategy, all utilities across the continent can perform similar audits and recognise a baseline from which to grow. African Utility Week, which begins next week, is the ideal platform for all stakeholders to similarly take inventory and inject life into their plans for the future.