Risk of litigation, business closures due to load shedding, industry warns

The leaders of industry bodies have told Fin24 that load shedding is not a minor pain for companies, but rather poses a risk of closures, lost clients and even litigation.

Fin24 spoke to the heads of the South African Chamber of Commerce and Industry and the Tourism Business Council of South Africa about the effects of load shedding.

This follows the recent escalation of Eskom’s energy capacity woes to the point where the utility was forced to implement Stage 4 load shedding.

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CEO of the Tourism Business Council of South Africa Tshifhiwa Tshivhengwa told Fin24 that while some companies run large systems with provisions to complete their functions regardless of grid pressure, smaller businesses like B&Bs will be impacted more by an unexpected round of load shedding.

Tshivhengwa said the risks were more serious than just a day of business lost. 

"It’s costly to our members. People have to use savings to buy a generator when they could have used that money to improve the guest’s experience. If guests are not given the full advertised tour experience from businesses, that is a breach in the service agreement," Tshivhengwa said.

• READ: SA's new reality: 9 things you need to know about load shedding to help you see the light

South African Chamber of Commerce and Industry CEO Alan Mukoki told Fin24 that rolling load shedding, with no indication of when it might cease, scares investors away from South Africa and scares customers away from businesses.

"The current state of Stage 4 has had a devastating impact on business. Many people are trying to run production lines and systems based on orders they currently have as well as meeting their contractual obligations," said Mukoki.