Business rightly fed up with broken services

Business is traditionally reluctant to criticise the government publicly, preferring to lobby behind closed doors. Not any more. The chorus of industry leaders speaking out about failing infrastructure, a broken Eskom and an increasingly erratic water supply is growing. And rightly so.

The government’s continued failure to provide power, water and usable roads means doing business is not just difficult; at times it’s impossible. President Cyril Ramaphosa’s speeches about attracting investment to drive job creation and expansion are an empty promise when businesses are continually in crisis mode.

Chris Schutte, the CEO of Astral, SA’s largest chicken producer, says domestic producers are lurching from one crisis to the next, and competitors are forced to help one another when a lack of power and water means farmers are unable to produce chicken feed.

Readers of this publication will know of unreliable power and water provision in Standerton, Mpumalanga, where Schutte’s company is the biggest employer. And Astral’s Pretoria farm and abattoir face regular water outages, sometimes daily.

In despair, the company went so far as to haul the National Treasury and the Lekwa municipality to court in 2020 for failing to provide basic services. The municipality has so much debt that Eskom throttles electricity supply. In April 2021, the company secured a judgment forcing the municipality to draw up a financial management plan under Treasury supervision and manage finances in order to provide services.

And have power and water supplies improved since the court judgment? “The short answer is ‘no’,” says Schutte.

Chicken producers don’t operate in a vacuum; they compete with frozen imports that come from countries with reliable power and water supplies, not to mention subsidies for farmers.

To expect Astral, or any other local company, to be globally competitive while contending with broken infrastructure is to expect a miracle. Astral incurs additional costs to ensure a stable power supply via turbine generators and cleaning water with a R60m system.

These issues aren’t new. In 2021, Sibanye-Stillwater CEO Neal Froneman said SA and mining firms battle to attract foreign investment, because the government and municipalities are failing. “It’s one of the reasons foreign companies don’t want to come here; they can see they’ll have to do what the government is supposed to do.”

Is anyone in government listening?

This week, Pick n Pay chair Gareth Ackerman asked that the government’s extended public works programme include the removal of litter, repairs of potholes and fixing other key infrastructure with “immediate effect”.

He said: “Our towns and cities are taking severe strain.” Pick n Pay can’t get insurance in some areas because of infrastructure failure, which he says also compounded the damage and suffering caused by the recent KwaZulu-Natal floods.

Businesses are becoming as self-sufficient as possible. Besides the ubiquitous generators, shopping malls are installing solar panels on rooftops and mining companies are providing security to stop thieves destroying SA’s rail network.

But, much of that expense is passed on to consumers already reeling from record-high petrol prices and rising food prices. Business doesn’t expect things to get better any time soon. Sibanye-Stillwater’s annual report last month says the firm anticipates continued weakness in state delivery of public services and links this to social instability.

“We foresee an increasing need for private sector-led initiatives to compensate for these shortcomings in order to sustain a stable society in our operating areas.”

Ultimately, the consumer is going to suffer further. Schutte says with tight operating margins, it has little choice but to pass on rising costs to consumers.

It’s no surprise, then, that business has had enough. Unfortunately for voters, the soonest they will be able to say whether they’ve had enough is at the general elections in 2024.

While Operation Vulindlela has made welcome strides to unravel red tape, it should also be paying attention to the basics — fixing roads and ensuring reliable water and power supplies.

PICK N PAY CAN’T GET INSURANCE IN SOME AREAS BECAUSE OF INFRASTRUCTURE FAILURE