A REAL POWER SHORTAGE:Acute Power Squeeze:
Eskom delays contracts to new customers in power squeeze
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CAPE TOWN, South Africa (The Associated Press) - Mar 5 - By CLARE NULLIS Associated Press Writer
South Africa's electricity utility said Wednesday it will not supply any major new customers in the coming four to six months because of the acute energy crisis.
Eskom spokesman Andrew Etzinger said the company would honor already signed contracts to supply electricity to big industrial users, but it would not consider new applications.
The electricity shortage, due to years of under-investment and rising demand, reached a crisis earlier this year. South Africa's industrial hub of Johannesburg has seen regular outages, wreaking havoc with industrial production and small businesses.
South Africa is dependent on coal-powered stations for more than 90 percent of its electricity. Eskom wants to double generating capacity by 2011 by bringing three mothballed power stations back into production and building two new power stations.
The country's gold, platinum and diamond mines - the backbone of the national economy - have been rationed to 90 percent of their former usage and have protested that they are bearing the brunt of the shortage. Miner Goldfields has warned that the electricity disruptions may force it to shed nearly 7,000 jobs.
Etzinger said the freeze on new contracts would apply to light industry and bigger concerns and was meant to avoid putting extra strain on the system to the detriment of the mines. He added the company would continue to provide power to new housing developments and schools.
Business Unity South Africa said it was wrong to impose a blanket ban on all new investments. Chief Executive Officer Jerry Villakazi said Eskom should review each application.
"We cannot switch off and switch on investment," said Villakazi. "You can't say to investors, 'Wait and come back after six months or a year.'"
There are concerns that corporations will now be prompted to look at other countries, undermining South African government's drive to attract more foreign investment.
Etzinger said Eskom would honor its commitment to supply Alcan's planned new energy-guzzling aluminum smelter near the coastal city of Port Elizabeth. The project has drawn criticism because it will provide relatively few jobs in proportion to the energy it uses.
All projects related to the 2010 World Cup soccer finals and a high speed rail link between Johannesburg and Pretoria will also be unaffected.