Grand Inga promises to light up southern region
June 26, 2009
If the Grand Inga hydropower project on the lower Congo River could get started, it would generate about 40 000 megawatts - enough electricity to meet the current power needs of the whole of southern Africa.
It's a big "if" for an $80 billion (R642bn) project that would require substantial private sector investment in addition to that from development finance institutions. The global credit situation is not going to make it easy to finance what would be the world's biggest hydropower project.
Institutions such as the World Bank say that after solar power, hydropower offers the best potential for meeting Africa's energy requirements. And yet only 5 percent of the continent's hydropower potential has been tapped.
Globally, hydropower contributes slightly less than 20 percent of electricity generated.
As the world moves into an increasingly carbon-constrained world, projects like Grand Inga are going to have to be taken more seriously - although it is not without its critics. Some NGOs are concerned the project would increase Africa's vulnerability to the effects of climate change, and say rural communities won't benefit from a scheme that would serve to power foreign businesses seeking cheap electricity in the region.
And yet, from the point of view of mitigating carbon emissions, Grand Inga could be a better option than building more thermal coal power stations to service those same interests.
The talk now is that the funding gap for getting Grand Inga started could, in large par,t be filled by the mining industry.
Certainly, BHP Billiton, which plans to build an aluminium smelter in the region, is particularly interested in one of Grand Inga's little siblings, the long-delayed Inga 3, which is set to provide 4320MW of hydroelectric power.
Last week the Democratic Republic of Congo (DRC) opened bidding for Inga 3, which has an estimated price tag of $7.6bn. It could be commissioned within nine to 12 years.
In addition, the Inga 1 and Inga 2 plants, built in 1972 and 1982, respectively, are being refurbished to raise their capacity to 1 700MW within three years. They supply power to mines in the Katanga region of the DRC.
Sickening salaries
Two years ago the government imposed a pay and conditions deal on trade unions battered by a long, bitter and inconclusive public sector strike. It was a two-year deal that was supposed to phase in an occupation-specific dispensation (OSD) for a range of employees in the public sector.
The OSD was designed to provide a progressive series of pay and benefits grades that would provide incentives, especially for specialists, to remain in the public service. But by and large, the government did not implement this agreement. Doctors, in particular, were enraged, and finally - and uncharacteristically - took the strike action that precipitated the recent crisis.
During the action, the idea of a 50 percent across-the-board pay rise became part of the discourse. However, this was never part of the 2007 agreement.
But the 50 percent notion was fuelled by comparisons with other sectors of the public service, notably parliament. It has been pointed out that back-bench MPs, with no other qualifications than party loyalty, can receive a package of more than R59 000 a month, while a doctor, saving lives daily after six years of arduous study, can be paid as little as R8 000.
The pay of directors-general in various ministries has also been cited by disgruntled doctors, along with the R100 000 a month paid to board members who have apparently failed to adequately administer the National Lotteries Board.
"We're not after that sort of money, but we want to be properly remunerated for the work we do," said one striking junior doctor.
Complaint up in smoke
The antics of the country's dominant cigarette manufacturer, British American Tobacco South Africa (Batsa), do not undermine the rules of healthy competition, according to the competition tribunal.
Yesterday the tribunal dismissed the application brought by the competition commission and Japan Tobacco International (JTI) against Batsa. The commission and JTI had applied to the tribunal to impose a fine on Batsa of up to 10 percent of its annual turnover for abusing its dominance by engaging in exclusionary acts in contravention of the Competition Act.
The early days of the case involved high drama and tales of crude efforts by Batsa to keep JTI's Camel off the shelves. But the claims were not substantiated and the case rather quickly deteriorated into the minutiae of marketing theory.
Batsa's products include Peter Stuyvesant, Dunhill and Kent.
Some of the details about marketing tactics used to sell product in a highly regulated industry were quite fascinating, but some were just tedious.
The case certainly highlighted the inordinate power a dominant player has in a market in which participants face severe restrictions on their ability to influence potential customers.
But the tribunal's view appeared to be that this power was not abused and did not represent an impossible challenge for a well-resourced company such as JTI.
Indeed, the tribunal seems to feel that Batsa is so concerned to promote the health of the cigarette industry ("if not the health of its customers", remarked tribunal chairman David Lewis) that it actually plays a pro-competitive role in the market.
For this reason, the tribunal suggests that JTI focus its efforts on competing for market share, rather than attempting to use the regulators to stymie the competition.
The tribunal also deemed it significant that a third competitor in the marketplace, Marlboro, had not felt it was necessary to make similar allegations against Batsa's dominance.
Edited by Peter DeIonno. With contributions by Ingi Salgado, Terry Bell and Ann Crotty
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