• Fifteen years….remember this number.
• Just short of fifteen years ago South Africans were introduced to the concept of “load shedding”. I am not going to rewrite the history of this debacle. We know the story well.
• But it’s been fifteen years...fifteen long years.
• To understand how long fifteen years is let me make some comparisons.
• The world’s tallest building, the Burj Khalifa in Dubai took 6 years to build. The building is so high that they had to build pit stops for the concrete on the way up. This was because the concrete would get hot and dry out, and as a result, they had to rehydrate the concrete at regular intervals. But it still only took them 6 years.
• An electrical engineering degree takes 4 years to complete.
• In theory this means that in 2008 – if I had started a degree in electrical engineering, I could have completed it, then went to work on the project in Dubai, and STILL have 5 years left to decide what else to do with my new found skills.
• World war one lasted 4 years. World war two lasted about 6. Tack them on to each other and you still have time for a few other wars. Two global wars that required an almost indeterminable amount of energy and cost the lives of 10’s of millions of people did not last 15 years.
• In 1961 President Kennedy announced that man would take a little trip to the moon. Eight years later Armstrong and his pals made a footprint on a sphere almost 400 000 Kilometers away from our blue planet. Only Eight years – only just about half the time that our Government and Eskom have used to build a few power plants.
• And last week our President – He that heralded in a “new dawn” 5 years ago asked South Africans to be patient.
• In 15 years Eskom has managed to build 2 new plants that don’t work.
• Load shedding is worse than ever. Eskom has been through more CEO’s than our national cricket team can score runs. Patience indeed???????
• I did not do my electrical engineering degree. Neither did I help with the construction of the world’s tallest building, so I am no expert, however, it appears to me that Eskom, unless by some divine intervention, is unsolvable.
• If things could not improve in 15 years – why would South Africans have any confidence in the next 15 years?
• In the last 15 years Eskom has managed to successfully do the following…
o Explode the balance sheet
o Inflate the workforce
o Run down the fleet
o Increase tariffs by anywhere between 500-700%
• Yet somehow they have been unsuccessful in producing the thing that they are set up to produce. In fact, they miraculously produce less.
• The implications for the South African economy are enormous.
• I cannot even begin to list the implications here – I’m scared of blowing up my new upgraded software. However, the downstream impacts are almost to ghastly to contemplate.
• Currently we are at stage 6…and we are told that we will be at this level “for a while”.
• The specter of a complete blackout is a very real possibility.
• On top of all the current global macro uncertainty it cannot bode well for the Rand.
• 18 to the USD seems cheap in my opinion.