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Thursday, June 20 2019 @ 10:00 am UTC

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HOMEOWNERS ADVISED TO REDUCE DEBT

- GENERAL NEWS

This is while interest rates remain stable.

Homeowners need to prepare not only for potential inflation-activated interest rate increases, but also a significant rise in household expenses.
PROPERTY NEWS - The South African Reserve Bank’s Monetary Policy Committee’s decision to keep interest rates unchanged for at least the next two months, was in line with most analysts’ expectations, but raised a few eyebrows after a slight drop in inflation triggered hopes for a potential interest rate decrease from some.

With the repo rate now pegged at 6.75%, the prime lending rate at 10.25% and minimum repayments on all forms of credit remaining unchanged, the Reserve Bank’s decision offers consumers little in the way of tangible financial relief.

However, Tony Clarke, MD of the Rawson Property Group, says this time presents a valuable opportunity for existing and prospective homeowners, nonetheless.

“In terms of inflation, this could well be the calm before the storm,” says Clarke. “The Monetary Policy Committee has already vocalised concerns over the upward pressure Eskom’s electricity tariff hikes and unstable international oil prices will have on inflation. If these influences cause the inflation rate to rise much beyond the Central Bank’s preferred target midpoint of 4.5%, we could well see the repo and prime lending rates start to climb once again.”

Read more on how inflation influences the repo and prime lending rates, here.

Eskom’s electricity tariff increases amount to an effective 14% and will start affecting consumers in most municipalities well before the end of this year. (The city of Johannesburg has announced a 13% increase as of 1 June.) Water tariffs are also on the rise, adding to the financial pressure on consumers already burdened with petrol prices at their highest levels in six months.

As a result, Clarke says homeowners need to prepare not only for potential inflation-activated interest rate increases, but also a significant rise in household expenses.

“We would have loved to have seen an interest rate decrease giving homeowners a bit of breathing room to prepare for rising costs coming down the pipeline, but the unchanged interest rate still offers an important chance to consolidate finances, pay off debt and boost savings as much as possible,” he says.

“This will go a long way towards minimising the effect any interest rate increases will have on the security of consumers’ property investments and help new purchasers cover their necessary fees and deposits, despite tight financial times.”

While the situation may sound dire, Clarke says comparatively high interest rates on an international level will fuel foreign investment and boost both the economy and the property market in the long run.

This, he says, together with the short-term price-growth stagnation that has been affecting properties across the country, makes now a surprisingly favourable time for property investors with the means to get in on the action and capitalise on future growth prospects.

“Price stabilisation means there are plenty of well-priced properties available, and lenders are coming to the table with some very competitive mortgage rates,” he says.

“I definitely wouldn’t recommend overextending yourself in these liminal moments, but using this time to buy low and pay off as much debt as possible could put you in a strong position for the future.”

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SOUTH AFRICANS SEND A CLEAR MESSAGE TO POLITICIANS

- GENERAL NEWS


Provisional results indicate that the ANC will continue to govern, albeit with a reduced majority.
ELECTION NEWS - Although the Electoral Commission is only expected to make a final declaration on the 2019 national and provincial election much later this afternoon, provisional results indicate that the ANC will continue to govern, albeit with a reduced majority.

In 2014, the ruling party amassed 62.15% of the national vote. This year the ANC managed 57.51% (10,026,385 votes) support. 2019 was the third year the ANC posted a decline in support.

Similarly, national support for the Democratic Alliance dwindled from 22.23% in 2014 to 20.77% (3,621,188) in 2019. The 2019 results reversed the steady growth the party experienced since 2004.

The EFF, on the other hand, did not reach the 12% national support that many polls predicted in the run-up to the election, yet managed to get double figures when the final tally put the party's 2019 national support at 10.79% of the vote. In 2014, the EFF managed 6.35% of the support. The EFF retains their position as the official opposition in Limpopo and the North West, and will now become the new official opposition in Mpumalanga.

In total, 17,671,439 (65.99 %) voters participated in the election. However, had the spoilt votes (235,451) been a political party, it would have garnered more national support than the ACDP (146,262) and GOOD (70,408) parties combined.

Votes for the Inkatha Freedom Party (588,839) and Freedom Front Plus (414,864) placed the parties in the national top ten party list in the 2019 elections.

The top five political parties in the national vote are:
ANC (57.56%), DA (20.77%), EFF (10.79%), IFP (3.38%), and FF Plus (2.38%).

Freedom Front Plus Western Cape leader and chief whip in Parliament, Corné Mulder explained to News24 that the FF+ will increase their representation in Parliament from 4 seats to 10 seats. He said the EFF representation will go from 25 seats to 44 seats (+19), and the IFP will increase their representation from 10 seats to 14 seats.

Conversely, the DA will have four fewer members in Parliament, going from 89 seats to 85 seats. The ANC will forfeit 19 seats, going from 249 seats to 230 seats.
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DA LOOKING FORWARD TO ANOTHER 5 YEARS OF MAKING PROGRESS TOGETHER

- GENERAL NEWS


ELECTION NEWS - The people of the Western Cape have placed their trust in the DA to govern the Western Cape with an outright majority.

"We are grateful to voters who came out in their thousands to vote on Wednesday, despite the rain and IEC difficulties, to give us a decisive mandate for the next five years. We thank you for placing your trust in the DA – we won’t take your vote for granted and will use it responsibly," DA Premier candidate Alan Winde said in a press statement.

"We will keep fighting for you, and will deliver on our promise to residents. We will keep growing the economy to deliver more jobs for our people. We will fight for a provincial police service, so that the Western Cape receives the police resources it deserves. And we will fight to run a provincial train service that works and runs on time.

"The Western Cape is already recognised as the best province in the country. Our job for the next five years is to make it even better. We will remain focused on speeding up delivery of basic services, and the best education and healthcare systems in the country," Winde said.
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ANC WINS 2019 ELECTION WITH A REDUCED MAJORITY

- GENERAL NEWS

ANC wins 2019 elections.

ELECTION NEWS - The IEC has declared the results of the 2019 national and provincial election despite complaints by several of the smaller political parties that called for an independent audit of all the election results.

Both the ANC (230 seats) and DA (84 seats) will return to Parliament with fewer seats. The ANC has recorded a reduced majority of 57.5%. The DA has dropped to 20.76% from its 22.2% in 2014.

The Economic Freedom Fighters (EFF), however, increased their representation in Parliament from 25 seats to 44 seats.



The sixth Parliament will see newcomers GOOD and ATM (two seats each) join the ranks of the IFP (14 seats), Freedom Front Plus (10 seats), ACDP (2 seats), UDM (2 seats), AIC (2 seats), NFP (2 seats), GOP (2 seats). They will be joined by the PAC and Aljama with one seat each.

The ANC retained the eight provinces it governed after a nail-biting wait for the final results in Gauteng. Gauteng will be governed with a slim ANC majority of 50.1%.

The seat allocation for the provincial legislatures are:



WESTERN CAPE:

DA: 24 (down 2)
ANC: 12 (down 2)
EFF: 2 (up 1)
GOOD: 1 (new)
ACDP: 1 (no change)
VF+: 1 (up 1)
ALJAMA: 1 (up 1)
GAUTENG:
ANC: 37 (down 3)
DA: 20 (down 3)
EFF: 11 (up 3)
VF+: 3 (up 2)
IFP: 1 (no change)
ACDP: 1 (up 1)



EASTERN CAPE:

ANC: 44 (down 1)
DA: 10 (no change)
EFF: 5 (up 3)
UDM: 2 (down 2)
ATM: 1 (new)
VF+: 1 (up 1)



FREE STATE:

ANC: 19 (down 3)
DA: 6 (up 1)
EFF: 4 (up 2)
VF+: 1 (no change)



KWAZULU/NATAL:

ANC: 44 (down 8 )
IFP: 13 (up 4)
DA: 11 (up 1)
EFF: 8 (up 6)
NFP: 1 (down 5)
MF: 1 (no change)
ATM: 1 (new)
ACDP: 1 (up 1)
LIMPOPO:
ANC: 40 (up 1)
EFF: 7 (up 1)
DA: 2 (down 1)



MPUMALANGA:

ANC: 21 (down 3)
EFF: 4 (up 2)
DA: 3 (no change)
VF+: 1 (up 1)
BRA: 1 (no change)



NORTHERN CAPE:

ANC: 18 (down 2)
DA: 8 (up 1)
EFF: 3 (up 1)
VF+: 1 (up 1)
North West:
ANC: 21 (down 2)
EFF: 6 (up 1)
DA: 4 (no change)
VF+: 2 (up 1)
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FUEL PRICE TO INCREASE BY 54C ON WEDNESDAY

- GENERAL NEWS
The increase takes the petrol price back towards the record territory reached last year.



Petrol has increased by more than R4 since January.
NATIONAL NEWS - On Sunday, the department of energy revealed that a much-anticipated petrol price increase will be kicking in next month.

The price of both grades of petrol – 93 octane and 95 octane unleaded (ULP) and lead replacement petrol (LRP) – will increase by 54c/l with effect from midnight on Tuesday, the department announced.

Diesel 0.05 percent sulphur will increase by 1c/l, while the price of diesel 0.005 percent sulphur would remain unchanged, the department said in a statement on Sunday.

The wholesale price of illuminating paraffin would increase by 3c/l and the single maximum national retail price (SMNRP) of illuminating paraffin would increase by 4c/l. The maximum retail price for LPGas would increase by 84c/kg.

The department cited international factors, including the rand’s value against the dollar-denominated oil price. They said that the increase was not as high as initially feared.

Petrol has increased by more than R4 since January.

Unexpectedly strong international fuel prices had earlier raised the spectre of an unwelcome fuel price hike for petrol users at the end of April, according to the unaudited mid-month fuel price data released by the Central Energy Fund, the Automobile Association said earlier this month. They predicted an increase of 56c per litre for petrol.

“The international product price of diesel climbed somewhat in the first half of April, while petrol has made a substantial jump. Diesel’s smaller increase is likely due to variations in international refining capacity, as well as the approaching end of the northern hemisphere winter when demand for diesel fuels for use in peaking power plants and as a heating fuel diminishes,” said the AA.



The price of both grades of petrol – 93 octane and 95 octane unleaded (ULP) and lead replacement petrol (LRP) – will increase by 54c/l with effect from midnight on Tuesday.

“The ground gained by the local currency has cushioned some of the blow, with diesel currently showing a slight decrease. But petrol users are in for a shock. Price stability in illuminating paraffin is welcome as South Africa heads into its own winter, during which many households will be using paraffin as a heating fuel. But the rise in petrol is cause for concern when our economy is already in difficult waters,” the AA concluded.

In their statement, the energy department said: “The settling of contagion risks from emerging markets provided a foundation for the rand’s strengthening trend. This decreased the contribution on the basic fuel price of petrol, diesel and illuminating paraffin by about 13c/l.”

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MOODY’S IN EFFECT KEEPS SA AT INVESTMENT GRADE

- GENERAL NEWSMOODY’S IN EFFECT KEEPS SA AT INVESTMENT GRADE BY SKIPPING REVIEW DECISION



The US-based agency on Friday kept its Baa3 rating and stable outlook by simply skipping its March 29 assessment.


BUSINESS NEWS - The country appears to have dodged the ‘junk’ investment bullet again for now.

A month of bad news from Eskom regarding its generating capacity saw South Africans worry that the last of the big three ratings agencies, Moody’s, would lose faith in the country.

The US-based agency on Friday kept its Baa3 rating and stable outlook by simply skipping its March 29 assessment.

A short note was issued at nearly 1am SA time, Saturday morning, explaining the fact that the country had been among other entities skipped for assessment. No reasons were given.

Moody’s has skipped making an assessment on South Africa’s sovereign debt once before, and the next ratings action will now only have to be announced on November 1.

The other two major rating agencies, Standard & Poor’s and Fitch, had already downgraded the sovereign rating to “junk” in 2017, meaning only the Moody’s rating has allowed South Africa to stay on key bond investment indexes.

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"SARS MUST GUN FOR FAT CATS"

- GENERAL NEWS
The politically connected, those who received Bosasa bribes and cigarette kingpins should be targeted or ‘SA is in deep trouble’.



Acting Sars commissioner Mike Kingon during a briefing at the Sars offices in Pretoria, 1 April. Photo: Jacques Nelles
BUSINESS NEWS - Despite the SA Revenue Service managing to increase its tax collection for the financial year ended 31 March, it still saw a shortfall of R14.6 billion from what was estimated.

But the service has to start collecting debts from the politically connected if it wants to see an improvement, an expert says.

The revenue service released the preliminary revenue outcomes for the 2018-19 financial year, collecting R1.287 trillion, failing to reach its target of R1.302 trillion by 1.1%.

The main sources to contribute to the revenue figure were personal income tax, which contributed R493.8 billion (38.3%), value-added tax, which contributed R324.6 billion (25.2%), and company income tax, which raked in R214.7 billion (16.7%). Customs duties (4.3%) contributed R55.2 billion.

Compared with the 2019 budget estimate of R1.345 trillion, this resulted in a deficit of R57.4 billion, and a further R14.6 billion against the revised estimate of R1.302 trillion.

The debtor’s book, however, was the “deep” concern, standing at R145 billion after it had grown by R14 billion in the recent financial year, acting Sars commissioner Mark Kingon said. “It has grown at R14 billion, a significant increase… Some of the debt could be ancient. It goes back many years and the older a debt becomes, the more difficult it is to collect.”

This outstanding debt might not be recovered, though, as the economy was strained and some people have lost their jobs, economist Mike Schussler said.

“Municipalities are owed R130 billion and write-off R21 billion because people are using things they don’t pay for. The same for tax. It would be difficult.”

In 2016, former Sars commissioner Tom Moyane’s nephew allegedly received a multimillion-rand debt collection deal from the revenue service. Last year, Moyane denied any knowledge that his friend and businessperson Patrick Monyeki was doing business with Sars debt solutions provider New Integrated Credit Solutions.

“Sars would have to not just collect debt but also collect tax from politically connected people,” Schussler said.

Schussler fingered cigarette kingpin Adriano Mazzotti and those who received “Bosasa bribes” as some who should be targeted for tax collection.

“The cigarette industry owes between R8 billion and R10 billion and could cover a lot of holes. There seems to be a very slight attitude to paying taxes, like the ones who got Bosasa bribe money, which needs to be taxed.

“We don’t know what happened to EFF leader Julius Malema [and his alleged tax evasion]. There is a lot of evidence that people who are politically connected are not paying all the taxes. The morality of the tax system is under threat and it is frightening.”

“Getting R15 billion less says SA is in deep trouble. Government would have to borrow more money and cut back on spending.”

R29 billion of the outstanding tax debt was under dispute, Sars chief officer of finance Johnstone Makhubu said. “It does not mean when a debt is undisputed, it is collectable. Some has aged and some is related to fraud.”

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ELECTIONS 2019: WHAT YOU NEED TO KNOW

- GENERAL NEWS
SA’s elections have been praised for adhering to international election best practice. But they are not without problems.



South Africa holds its sixth national election on 8 May, coinciding with the country’s celebration of its silver jubilee as a democracy this year.

NATIONAL NEWS - South Africa holds its sixth national election on 8 May, coinciding with the country’s celebration of its silver jubilee as a democracy this year. The poll to choose national and provincial legislators is being billed as the most significant since apartheid ended in 1994.

The contest might well be a referendum on the performance of the African National Congress (ANC), which has governed the country with a comfortable majority since then. But the party is mired in corruption scandals and the country’s economy is terribly weak. Thabo Leshilo asked Kealeboga Maphunye to provide some background to the poll.

How many people are registered to vote, and what are their main demographics?
According to the country’s electoral commission, almost 27 million people have registered to vote. But this excludes about 9.2 million eligible voters that are not registered for these elections. Moreover, being eligible to vote merely signals intention, and not necessarily that one will cast their vote on election day.

Altogether, 703,794 new voters have been added to the voters’ roll ahead of the elections. This is normal by South Africa’s election standards, but worrisome because the number of new voters has not been consistent every five years.

A vast majority of prospective voters (81%) are younger than 30. More women (52%) are registered to vote than men (48%).

Gauteng, the country’s economic hub and its most populous province with about 14.7 million people or (25.4%) of the country’s people, has the highest number of registered voters according to the electoral commission. It is followed by KwaZulu-Natal, with a population of 11.4 million people (19.7%). The Eastern Cape province is third.

Racial politics will undoubtedly influence voting in this year’s elections, but the electoral commission does not collect voting statistics by race. So, the racial breakdown of past and prospective 2019 voters will never be known.

Who are the main contenders?
Altogether, 48 parties will be contesting the elections from the initial 285 parties that had registered for the poll.

The three key contenders are the ANC; the main opposition party, the Democratic Alliance, and the Economic Freedom Fighters, the third largest party in the country based on their national parliamentary representation.

Ten other parties are represented in the country’s parliament but currently pose less of a challenge to the incumbent. They are the Inkatha Freedom Party, the United Democratic Movement, African Christian Democratic Party, the Freedom Front Plus, the National Freedom Party, the Congress of the People, the Pan-Africanist Congress of Azania, Agang, the African Independent Congress and the African People’s Convention.

What are the biggest challenges to free and fair elections?
South Africa’s polls adhere to international electoral best practice. The country holds regular elections with high levels of integrity.

Since democracy in 1994, its elections have been consistently judged to be legitimate, free and fair. Its electoral commission is praised for its autonomy and for conducting elections that are impartial.

But there are problems that threaten this record.

The biggest is the prevalence of political killings, particularly in KwaZulu-Natal, where there has been a history of violence both between factions of the ANC as well as between the ANC and the Inkatha Freedom Party (IFP). Some recent incidents of violence and intolerance were also linked to the IFP-National Freedom Party split.

Another threat is sporadic violent community protests, and the fact that there are “no-go areas” for some political parties in some areas.

Ensuring that the credibility of the polls is not compromised could be undermined on election day if members of the South African Democratic Teachers’ Union are used as election personnel. This has been cited as a problem given the trade union’s alliance with the governing ANC.

The South African Police Service has also flagged ongoing power cuts as a major potential threat to the elections. The country is experiencing continual and intensive electricity shutdowns, as it tries to get its failing public power utility, Eskom, back on its feet. Unless contingency plans are made, thousands of voting stations might be affected during vote counting.

The election results could be disputed and even challenged in court on the basis that they aren’t free and fair if these problems aren’t resolved.

So it’s imperative that the electoral body and all election stakeholders work to ensure that the elections are credible, and reflect the wishes of the majority of the voters. A good place to start would be for the parties to abide by the letter and spirit of the electoral code of conduct they have signed to promote a free and fair contest.The Conversation

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WHAT ESKOM IS NOT TELLING US…

- GENERAL NEWS


The situation, particularly in its coal fleet, is worse than we think.

What Eskom is not telling us…
Eskom is facing a shortage of electricity capacity and its back-up reserves are working full-time to keep the country from plunging into darkness. Photo: Nadine Hutton/Bloomberg
BUSINESS NEWS - We now know that the dramatic and chaotic escalation of load shedding on Saturday – from Stage 2 to Stage 3 and then Stage 4 within hours – was caused by the loss of imports of 1 100 megawatts (MW) of power from Mozambique. Tropical cyclone Idai damaged the transmission lines that carry power to South Africa from Cahora Bassa. Eskom has to maintain an operating reserve of 2 000MW at all times, hence the need from Saturday to curtail load through load shedding (which is, effectively, managed blackouts).

The current underlying problem in Eskom’s generating unit, though, is worse than simply what happened in Mozambique on Saturday. On Friday, it announced that load shedding would continue until Sunday. City Press/Rapport cites acting head of generation Andrew Etzinger as saying that two further units at its power stations “became inoperative” on Friday night. Whether this caused the announcement, we will never know.

Along with the announcement on Friday came the ‘forecast’ that Stage 2 load shedding would continue until “the middle” of this week. This is unprecedented. And the only reason that this forecast was/is “only” until Wednesday is because a de facto long weekend starts on Thursday! With imports off the table for days (if not weeks), expect the forecast to deteriorate.

Pumped storage as base-load
What Eskom hasn’t said explicitly is that it relied (heavily) on its pumped storage schemes to keep the lights on during Saturday. These schemes – Drakensberg, Ingula and Palmiet – together (nominally) produce 2 724MW. They are not intended to produce base-load power for the simple reason that they are net users of electricity!

In other words, they use more power than they produce.

The schemes are used to supply electricity during peak periods, with water being pumped back up during off-peak periods, i.e. overnight.

The details are generally couched in opaque references to “water reserves”, but on Saturday night Eskom for the first time stated that Stage 2 load shedding would continue through the night “in an effort to build up necessary water reserves in the pump storage scheme”.

Presumably it is referring to at least both Drakensberg and the new Ingula power station, which together can generate 2 300MW. The decision to continue with load shedding through the night was another unprecedented one (it has never before continued beyond 11pm) and points to the utility once again using the pumped storage schemes for base-load power through Sunday.

It must also be noted that recent instances of load shedding run for longer, often starting at 8am and ending at 11pm. Previously, load shedding would run until 9pm only. This suggests far less of a peak problem (which was the case, historically), and more of a base-load generation issue.

After Stage 4
Eskom’s (now outdated) infographic about Stage 4 load shedding explains matter-of-factly that “should there be a need to go beyond Stage 4, Eskom and the municipalities will implement contingency schedules”. But late last year the utility published schedules for load shedding all the way to Stage 8, something it was forced to do by the National Energy Regulator of South Africa. This is a good thing, as one wonders whether these “contingency schedules” were as detailed and robust as they ought to have been.

Part of the decision to use the pumped storage schemes as base load power sources in an unexpected emergency was surely to ensure that the utility avoided – at all costs – a situation where load shedding shifted to Stage 5. It has never before removed more than 4 000MW of demand from the grid (under the old Stage 3 and new Stage 4 regimes). Because of this, a scenario where it is forced to cut demand by 5 000MW or 6 000MW inherently carries a number of risks. A lot is made of the fact that it would be politically unpalatable to shift to Stage 5, but the country is hurtling towards an election with load shedding almost certainly a regular occurrence until then.

Underlying coal plant performance is dire
In its most recent status report, Eskom says total installed capacity is 46 292MW. From a capacity point of view, it includes the “expect import at Apollo” (i.e. the ±1 100MW from Mozambique) and excludes “Avon and Dedisa”. It is a mystery why it would even contemplate including either of the latter, given that they are peaking plants operated by independent power producers (IPPs).

Using that report, we can see that in the first week of the month, Eskom had somewhere between 26 314MW and 28 077MW available to fulfil peak demand. We do not know the performance of various plants (or even types of plants), but we do know that given the demand/supply mismatch, Eskom is relying heavily on its pumped storage schemes, and its gas/diesel peaking plants.

Strip this out of the equation (as well as imports and Koeberg) and it is highly probable that Eskom has less than 19 000MW available from its coal fleet.

There is an additional 700MW in hydroelectric and wind power (from Eskom’s Sere Wind Farm), with use of the former at the Gariep and Vanderkloof dams “restricted to periods of peak demand”. Factor this in, and the total starts looking a lot closer to 18 000MW.

Whether or not renewables and other IPPs are included remains unknown. But with 1 005MW accessible from Avon and Dedisa, it wouldn’t be a stretch to imagine that these very much form part of ‘available generation’. A well-placed source suggests that Avon (670MW) has often been running for 24 hours a day in recent weeks.

Even at a generous 20 000MW, the electricity available from Eskom’s coal fleet is barely 52% of the ±38 599MW nominal capacity. At 19 000MW available from coal, it drops below 50%. The utility keeps saying that available generation capacity availability is 67% (versus a 80% target), with a reported energy availability factor (EAF) of ±62%.

In its core coal fleet, the numbers are horrifyingly worse. And it’s this story that Eskom isn’t telling (and won’t).

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BLACKOUTS: MOBILE NETWORKS UNDER SEVERE STRAIN

- GENERAL NEWS


Network operators across the country have been battling sophisticated syndicates that have been stealing batteries daily.

Eskom’s rolling blackouts are placing severe strain on mobile network operators trying to keep base stations up and running.
NATIONAL NEWS - Eskom’s rolling blackouts are placing severe strain on mobile network operators trying to keep base stations up and running.

MTN South Africa said on Tuesday that despite “significant” investments in battery backup systems and generators, its sites are under threat due to stage-three and stage-four load shedding. And criminals are also taking advantage.

In a statement, the company said most of its sites have been equipped with battery backup systems to ensure its base stations can continue running when local power goes down. However, the frequency of the blackouts is resulting in batteries not having enough time to recharge.

“These batteries generally have a capacity of six to 12 hours, depending on the site category and require 12 to 18 hours to recharge, which in stage-three and -four load shedding is simply not happening,” said MTN South Africa executive for corporate affairs Jacqui O’Sullivan in the statement.

Excluding the amount spent on new batteries for new cellular sites, MTN spent around R300 million in 2018 on batteries for existing sites. In addition to the batteries, MTN has 1 800 generators in use and the company spent more than R120-million on diesel in 2018 to power the generators.

“Another significant additional cost of the load shedding is the extra on-site security that is needed to protect the batteries, generators and general site equipment from thieves and vandals,” MTN said.

‘Thieving’
“Network operators across the country have been battling sophisticated syndicates that have been stealing batteries daily. However, load shedding is seeing entire neighbourhoods cloaked in darkness at predictable times, which is offering criminals greater cover for their thieving.”

O’Sullivan said the result is a high cost to network providers and their customers each time a battery is stolen. “We have, for instance, had to spend in the region of R11-million to replace batteries at 100 sites in Gauteng. More broadly, we have had to spend R285-million on additional infrastructure to fix what was broken during the theft.”

Additional security is also required where mobile generators are deployed to stop them from being stolen.

“The extent of the outages has placed a significant strain on MTN’s overall network resources and teams have had to be reassigned from growth projects to emergency management of sites due to the load shedding.”

The problems don’t end there. The constant outages are also having a direct impact on the performance of the batteries, MTN said. With stage-four blackouts, the batteries’ integrity is compromised because of the insufficient time to recharge and due to the excessive drain on their power.”

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