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The Department of Energy has announced  a delay in the submission date for the third window of bidding for renewable energy suppliers. Submissions were due next month but have now arbitrarily been delayed to May 2013. One of the biggest disincentives to doing business in South Africa is the lack of electricity availability. The department’s delay now exacerbates matters, ultimately at the expense of small businesses and the consumer.

I have today written to the chairperson of the energy portfolio committee to call the Minister to account to parliament for the delay. The uncertainty created by government’s lack of political will and decisiveness undermines bidders’ incentives to invest in renewable energy and associated job-creation.

Bidders incur serious expense in ensuring that they are ready to submit a bid on time. The process is complex and requires an army of legal, technical, financial and empowerment advisors. Some smaller bidders are now at risk of having to close shop – a nine month delay is untenable for businesses that have already incurred this expense.

Independent power suppliers can contribute significantly to local employment creation. The upshot of the delay is that larger conglomerates – who can hold out for longer – will simply crowd out or consume smaller players.

The DA’s economic policy highlights the insider/outsider nature of South Africa’s economy and contains a number of plans to build a more inclusive economy. A major component of creating inclusivity is to establish the necessary certainty to incentivise small businesses to participate in the formal economy. Government’s inability to stick to deadlines undermines these efforts.

The Department of Energy’s recognition that ‘some potential bidders will be disappointed by the decision’ does not alleviate the economic consequences of the Department’s oscillation. But this debacle also points to the broader problem of the need for institutional reform in South Africa’s energy governance. Too many decisions are made as a function of the minister’s whim at the expense of economic growth.

Employment-creating businesses are suffering the effects of government’s inability to coordinate itself properly. The DA will continue to do everything in its power to resolve this problem.