BUSINESSES in Honiara have lost properties and revenue due to the ongoing power outage experienced in the city.
This was revealed in a survey recently conducted by the Solomon Islands Chamber of Commerce and Industry (SICCI) on the impact of load shedding on businesses.
The survey found that businesses are losing revenue in daily operations and property because of the load shedding which has now reached its fourth month.
The key issues highlighted in the survey are frequency of the load shedding on businesses, property loss and revenue loss.
To better understand the impact of load shedding on businesses, it is important to note the frequency of which businesses experience load shedding over the four months.
From the survey, 52 percent of the survey respondents stated that they experienced power outage more than four times a week, 37 percent experience power outage two times a day, 7 percent stated that they experienced power outage once a day, and 4 percent experienced power outage three times a week.
SICCI said from these data, it can be concluded that loading shedding on businesses is experienced daily which is alarming and a risk to property and revenue loss.
The loss of revenue in business indicated in the survey referred to the adjustment to business operations, delay in production, impact to customer/client services and damaged to frozen goods.
As a result, 86 per cent of the respondents’ stated that they have experienced huge drop in productivity due to the power outage, 79 per cent of the respondents’ stated that the power outage has caused disruptions in customer services leading to increasing operational costs, 61 per cent stated that the power outage has led to loss of revenue, 54 percent of the respondents’ said to have difficulties in meeting timelines and 39 percent of the respondents indicated that power outage is responsible for operational failure.
The survey also found that 48 percent of the respondents have to adjust their business operating hours due to load shedding, meaning no service/sale which leads to revenue loss.
On service delivery, 70 percent of the survey respondents indicated to have experienced delay in the delivery of their products/services, 59 percent of the respondents indicating reduced customer satisfaction, 37 percent reported a loss of customers and 33 percent of the respondents’ indicated impacts in other business operating areas.
In terms of property loss, in the survey refers to property such as computers, cold room refrigeration units and gensets. Loss in gensets is due to the prolonged load shedding that resulted in some cases the increased fuel consumption and machine breaking down because of the frequency of the load shedding.
Businesses indicated that using backup generators extensively and for extended periods resulted in fatigue and maintenance issues, as the generators are not designed for such heavy loads.
Other concerns are that with the constant power spikes these have instigated damage to computers and other electrical devices.
This leads to increased maintenance, repair costs and necessitating immediate replacement, an exercise proved expensive for businesses when parts have to be ordered outside of the country.
In the case of Solomon Brewery Limited, this situation is very serious that the power fluctuations have put immediate risk to their brewery equipment and potentially affecting their production. This in turn will affect customers as access to cold Solomon Brewery Limited products may be limited leading to potential sales losses.
The downturn of the current power outage has forced 59 percent of the survey respondents to invest in backup power sources to mitigate the impact of load shedding – an exercise most businesses said to be very expensive.
Suggestions as per the survey are as follows:
•Remove demand charges on alternative power sources and prioritise getting gensets and backup alternatives online quickly;
•Improve communications to inform large customers about the problem and load shedding, and be ready to attend to faults when power is restored, especially for cash power metres;
•Schedule and stagger the installation of new gensets to avoid simultaneous maintenance, and implement a maintenance and service plan for gensets and equipment;
•Consider transitioning to hybrid systems using fuel, solar, hydropower, or other sources;
•Invest in backup generators while faulty ones are being serviced and compensate businesses for losses due to power cuts; and
•Improve instrumentation and load balancing and consider lowering tariffs to normalise.
– SICCI
