Electricity interruptions cost Bay millions

INCONSISTENT electricity supply is one of the biggest business disruptions in Nelson Mandela Bay, leading to millions of rands in losses for many of the metro's employers.

Power supply interruptions and unplanned outages cost one Bay car manufacturer more than R11- million between January and March this year, Nelson Mandela Bay Business Chamber chief executive Kevin Hustler said.

Another Bay equipment manufacturer experienced a loss of 29 engine components in one night.

The mounting costs to high energy users due to electricity interruptions in the metro have meant that 950 jobs were lost over the past three years, Hustler said.

"Some of these outages affected businesses that supply just in time to our original equipment manufacturers from as far afield as East London. Power supply disruptions have a major impact, especially on the manufacturing sector.

"Companies running 24/7 [operations] have no catch-up capacity. These types of losses jeopardise companies' export programmes as they could come to be seen as unreliable suppliers," Hustler said.

Electricity dips can cost anything from R20000 to R100000 per supply disruption, depending on their duration and severity.

To recover from one such electricity dip takes between 20 minutes and four hours.

"Some of our city's biggest ratepayers have suffered consistent losses over the last year.

"The cost to industry in the city is running into millions of rands, which needs to be addressed urgently," Hustler said.

The chamber has had ongoing engagements with the municipality about the high electricity tariffs and power supply disruptions in Nelson Mandela Bay.

In April, the business community raised concerns with President Jacob Zuma and his ministerial delegation during a visit they made to the Bay.

"We must acknowledge that slow progress is being made, through engagements with city manager Mpilo Mbambisa and newly appointed electricity and energy executive director Silby Mathew," Hustler said.

"This situation cannot be turned around overnight.

"However, we believe that the required steps have been taken in the right direction to ensure proper planning and prioritisation that will secure the desires not only of business, but of the community at large into the foreseeable future."

General Motors SA spokeswoman Gishma Johnson agreed that the biggest problem affecting Bay industries was power plunges.

These had a number of causes, including failure of cable conductors, overhead lines, insulators, switches and transformers, she said. Conductor theft appeared to be contributing to these dips.

"In anticipation of any planned disruption, the company does have contingency plans in place," Johnson said.

"For example, we would increase production volumes in advance to meet customer demands.

"We do have business continuity plans for certain or significant events that are unforeseen. These are simulated as a matter of course.

"However, where a disruption occurs without warning and is of a temporary nature, we have procedures that enable us to resume production as quickly as possible," she said.

"The negative effect of this is additional cost of scrap, increased time required to recover production and energy costs. Ultimately these disruptions in isolation may seem minor but, if regular, will affect our competitiveness in a global environment."

Continental Tyre SA spokeswoman Jiminy-Ann Bosman said the main cause of business interruptions at the plant was power dips on the grid, but the company frequently reviewed its disaster recovery and business continuity plans to ensure minimal downtime.

The 2014 Metrofile Information and Records Management Trends Index found that in the past 12 months, two-thirds ( of South African businesses had been affected by various business interruptions, including power outages, natural disasters and public unrest.

Global Continuity SA general manager Greg Comline said the study highlighted the importance of businesses having an effective disaster recovery and business continuity plan in place.

The survey also found that about 40% of businesses had no such plans prepared. - Cindy Preller