CEO Voice June

CEO Voice June

Dear Members,

It’s been a couple of months now since the first case of Coronavirus was reported in South Africa. With the sector now back in full swing, and we are now able to start building a picture of the impact of these unprecedented times on our industry.

Through a quick industry survey, we have tracked the effects and implications of returning to work. Projects under construction are carrying the brunt of the strict Covid-19 HSE protocols on business operations, with some members reporting disruptions which have been more manageable with the use of modern technology. Others reported little operational impact apart from expenses related to PPE and work-from-home initiatives.  For smaller operations, it has been easier to maintain social distancing amongst staff to keep everyone safe which made it less cumbersome to adapt to new protocols.

There is a certain degree of impact on competitiveness where cost increases were anticipated in some instances, but this is not viewed as a distortion of competition in the sector as it impacts all market participants in the same way. The closure of borders during Level 5 and Level 4 lockdown resulted in certain supply chain delays, which has resulted in some industry players rethinking how they handle stock levels going forward due to the exorbitant costs of carrying extra stock. The biggest impact was a significant delay with delivery of a crane which caused extensive downtime at one of the wind farms.

In terms of the likelihood of impact on reaching commercial operation date (COD) on schedule, the industry believes that due to the late grid connections, there will be a better possibility to recover on time and meet the planned schedules.

Employment levels have not really been affected negatively and some members reported possible increases in numbers once stability is restored. Most members indicated that they didn’t need to make use of Special Grants and funding made available by government during lockdown.

The wind farms experienced different reactions from adjacent communities upon reopening of construction sites. While other communities were skeptical about the possibility of people from other provinces bringing the Coronavirus to their communities and demanding implementation of strict quarantine periods before construction commencement, other local communities reacted very positively to the reopening of sites. Generally, people were happy to go back to work again and make a living and will the HSE protocols in place employees feel safer and work has continued as expected.

Some industry commentators believe that the industry will be even more competitive after this pandemic period judging from the adaptation and resilience shown during this time. We remain hopeful that this pandemic will be behind us soon and we will be able to return to the normal ways of doing business in the wind sector.

Kind Regards,
Ntombifuthi Ntuli
CEO (SAWEA)

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