South Africa would require about R32,4-billion by the end of this year to deal with the backlog in its electricity distribution infrastructure, Department of Public Enterprises chief director Simphiwe Makhathini said on Tuesday.

Speaking at a reliability and maintenance conference on behalf of Public Enterprise Minister Malusi Gigaba, Makhathini also stressed that investment in maintenance was critical to ensure the reliability of electricity generation, transmission and distribution in South Africa.

A reliable electricity generation and supply system was needed to foster higher economic growth, to improve service delivery, to create jobs and to ensure the best use of the country's resources.

However, several municipalities, as well as Eskom's distribution unit, were under financial strain, said Makhathini.

He stated that the distribution industry in South Africa was in a dilapidated state, with one-third of municipalities that were not financially sustainable.

Makhathini urged all electricity users, including businesses and industries, to pay their electricity bills, noting that nonpayment added to the financial strain of municipalities, which added to their inability to do proper maintenance.

He further indicated that the country loses about R4,4-billion a year in equipment and electricity theft.

Meanwhile, he said that a decision with regard to the feasibility of restructuring the country's distribution assets into regional electricity distributors (Reds) would be made before the end of 2010.

If the Reds were not considered feasible, the Reds system might have to be reviewed, said Makhathini.

In 2003, government established EDI Holdings to oversee the restructuring of the country's electricity distribution industry. However, the implementation of the Reds system has seen repeated delays.

Meanwhile, Investment Solutions chief economist Chris Hart told delegates at the conference that the strong rand was not necessarily a negative thing for South Africa.

This would provide the country with buying power to acquire additional infrastructure, equipment and technology that it could use to improve its maintenance performance and the productivity of some sectors within the economy.

CHANGE IN ATTITUDE

Thomas Ålund, senior consultant at Swedish maintenance consultancy firm Idhammar, emphasised that businesses should change their attitudes to maintenance from one where maintenance is just done when repairs to equipment are required to preventative maintenance where equipment is continuously maintained to keep it running.

By adopting better maintenance systems, organisations, and particularly those in the manufacturing sector, could reduce their production losses, reduce time and quality losses, improve their competitiveness, reduce costs and reduce the impact of their operations on the environment.

This would lead to better profits and improved economic stability for companies, said Ålund.