Municipalities are in serious trouble right now…
The truth is the lifespan of infrastructure in the electricity grid is 50 years.
You don’t ever want the grid to approach that age on average.
If it does, there is a real danger of the whole thing breaking down all at once.
And now, there are reports out citing our entire grid has an average age of 48 years… Because it was not maintained!
Many municipalities are already in big trouble.
But how did things get so bad?
How South African municipalities racked up a R25 billion backlog
Well, for over a decade, our municipalities have been under spending by half! At the moment, spending on maintenance is only R3.5 billion annually, but to keep the grid healthy the figure should be double that.
And those numbers really stack up.
Municipalities’ (almost hilarious) bad planning has racked up a backlog of R25 billion!
If no one does anything, vast swathes of the country will be in darkness in little over a year.
Forty-eight odd sub-stations need replacing. This alone will cost around R6.125 billion!
But we also need 81 new sub-stations built. Plus, 12,733km of new transmission lines installed…
It’s now at the point that they HAVE to spend R174.7 billion to keep the grid going over the next 10 years.
It’s all in the government’s latest Transmission Development Plan.
There is NO way the government can let the grid collapse! And the work HAS to go out in order to keep our economy from grinding to a complete halt.
Our grid needs a comprehensive rescue plan...
And at the very least, R25 billion of the R174.7billion government set aside for its infrastructure plan WILL go to upgrading the grid in the next two years.
While your lights go off – make sure you profit as government fixes this problem
As I’ve said, our government needs to spend billions to fix this problem.
New substations and power lines have to be installed en-masse.
So, I propose we profit from this situation.
And, the easiest way to do that is through companies that will make money as they deliver on government projects to save this mess.
One particular company I like is Consolidated Infrastructure Group Limited.
The company is one of South Africa’s foremost providers of high voltage substations and overhead cabling.
Not only this, but the company also designs and develops alternative energy sources like solar and wind energy.
It’s currently completing projects on these in South Africa as well.
I’m not going into the details of the company here. But what I can say is – that its success is very closely linked with our livelihoods.
If it delivers on projects, and profits from them, our lights stay on. If it doesn’t, well that’s bad…
Here’s to unleashing real value
P.S. If you’d like to find out more about Consolidated Infrastructure Group Limited I urge you to read my November issue of The Resource and Scarcity Repor