Eskom halts supply to big developments 
13 January 2009

Property developers said last week they were losing income due to reduced project sizes and incurring extra costs since Eskom decided to review the issuing of new quotations for property developments requiring power of 100kVA and above.  Eskom said last year it would not provide electricity to new developments requiring more than 100kVA power because of SA’s low reserve margins.

The power utility is expanding capacity under a five-year project announced last year, estimated to cost R343bn, to ensure reliability of supply. 

A spokesman for Old Mutual Investments Group’s property investments division said its projects had been “significantly” affected by Eskom’s decision.  Developments had to be broken down into phases to ensure that the construction of each phase did not exceed 100kVA. The situation had also affected income which was lost due to the reduction of the project size, while extra costs were being incurred by installing back-up generators to supplement Eskom’s power supply.

Nicholas Stopforth, Gauteng regional director at Amdec Property Developments, said the company’s projects had been affected mostly from a timing perspective. “It is extremely difficult to determine when and if applications will be approved, and if approved what capacity will be made available. Consequently it becomes difficult to determine the magnitude of a development and its feasibility,” he said.

Loyiso Sibali, www.businessday.co.za