Michael Davies, CEO of ContinuitySA, discusses how companies should prepare for a national blackout:
Many businesses are worrying about the possibilities of a particular black swan - a sustained power outage or a national blackout - even though everybody (including Eskom) thinks this unlikely, but which would clearly have a devastating impact.
Unlike the "new normal" of municipal load-shedding that affects limited areas for a few hours at a time, here we are looking at a power outage that lasts days in a particular area, or that takes out the whole grid.
A company's ability to survive this type of catastrophic event hinges on its capacity to generate its own power, and that really means generators. Though alternative, greener power sources are gaining momentum - something that's long overdue - at present they are too expensive and inefficient for businesses to rely on in an emergency.
The big questions here are, how well managed are the company's diesel stocks and how well-maintained are its generators? Diesel needs to be circulated or it goes "bad", and generators (and uninterruptible power supplies) have to be properly and regularly maintained to perform on cue.
When it comes to a prolonged outage, a key success factor will be accessing diesel. Most companies will store supplies for only a few days, or in rare cases a few weeks. But a national blackout could last for months - I've heard 16 weeks given as a figure to get the national grid up, but nobody really knows. There would obviously be a run on diesel in such a case, and thus deliveries would be likely to be unpredictable. One way around this is to have a mobile tanker so that you could at least go and get diesel from the suppliers. Of course, if the suppliers have run out of diesel, it's game over for the moment.
In extreme situations like these, companies that are sole tenants or owners are at somewhat of an advantage, simply because they are able to exercise greater control. In multi-tenant situations, one could be relying on the landlord for management of the diesel supplies and generator maintenance. At the very least, this risk must be recognised and the hard questions put to the landlord.
Coming up
In my experience, there are some other areas where we are seeing high-impact, unexpected events happening in SA. The first is cyber crime, which is an international scourge, of course, but there's more of it here than one might realise: companies don't report it to protect their reputations. Others include fire and flooding, often in situations in which shared premises make one vulnerable to other companies' lack of preparation.
Again, the only way to meet these challenges is to build resilience into the company, and that's the topic of my next two articles.
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