Philippa Rodseth, executive director of the Manufacturing Circle that represents SA's manufacturers, says Eskom needs to release its turnaround strategy "as a matter of urgency" because the future of manufacturing in the country depends on it.
It was supposed to have been released in September.
Earlier this year Eskom CEO Phakamani Hadebe hinted that significant retrenchments would be part of it, but the government is strongly opposed to this.
Meanwhile, a combination of load-shedding and uncertainty is "striking at the heart" of the manufacturing sector, says Rodseth.
"Government needs to resist putting politics first because we can't risk losing industry, and the situation is becoming pretty dire," she says.
"Showing us the turnaround plan is fundamental to providing some predictability and comfort to our manufacturers and our investors.
"It's a fundamental component of providing confidence that . there is a plan that has been thought through and that is implementable."
Manufacturing provides employment for 1.8-million people and contributes 12% to GDP, less than half its contribution in the early 1990s. There are 300,000 fewer manufacturing jobs than 10 years ago when load-shedding started.
According to the World Bank, for every job directly created in manufacturing, another four are indirectly created. Some economists have calculated the indirect job multiplier to be between five and eight, making manufacturing by far the most important source of jobs.
"Manufacturing is the engine of growth for our economy. But in order to function properly, electricity is one of the primary inputs. Manufacturers need consistency with regard to certainty of supply and price escalation."
At the moment they don't know how much electricity is going to be available to them, when, for how long and at what price.
This is making it "very difficult to function adequately", she says.
"If businesses can't plan ahead it makes it very difficult to meet demand and orders." Businesses that can't meet demand or fulfil orders don't survive.
Having a back-up supply is unaffordable for all but bigger manufacturers, and almost prohibitively expensive for them.
"Some of them use diesel generators, but smaller businesses can't afford this."
When larger manufacturers switch to diesel it increases their costs "massively", she says.
One of the larger manufacturers represented by the Manufacturing Circle has calculated that bringing its diesel generators online during load-shedding increases costs by 30%. And electricity is already one of its largest cost components.
"That precipitates the vicious cycle in which manufacturing currently finds itself," she says.
"If you've got a problem with one of your primary inputs you make less profits, which means you manufacture less and have to reduce shifts or labour. This reduces consumer and investor confidence, and so that negative cycle is perpetuated."
Lack of consistency of supply is making it "very difficult" to meet existing orders. Making alternative plans is taking operational and managerial energy away from where the focus should be, on growing markets and increasing efficiencies.
The damage inflicted by electricity cuts is exacerbated by the ongoing absence of any turnaround strategy from Eskom.
"It makes investment decisions difficult," she says.
"Manufacturing is capital intensive. So if you're going to buy new equipment or expand your factory, you have to have a predictable basis on which to make that decision, because you've got payback periods and you've got to assess your returns over the medium- to long-term period.
"If you're uncertain what will happen in terms of one of your fundamental inputs, it makes planning very, very difficult."
The same goes for pricing. A year ago, when Eskom proposed a 19%-plus tariff hike, the Manufacturing Circle put out an investment tracker assessing at company level how much manufacturers were investing in property, plant and equipment, inventory, research & development and human capital.
They said they would not be able fully to recover the increase in costs from customers, and therefore would have to explore "rationalising strategies", including cutting jobs and freezing investment in expanding productive capacity.
Now Eskom has applied for a 15% per annum tariff increase over the next three years. Based on previous research, this will lead to another significant drop in demand, she says.
"Eskom must do what other manufacturing businesses do. It must address its own efficiencies before it seeks to recover losses from its customers, because they're going to look to alternative strategies."
If Eskom needs a short-term capital injection to deal with its debt crisis, it must come from the shareholders, she says.
"You can't kill your customers."
Load-shedding has already driven them to look for other options, a process that is now accelerating.
Sappi, which is a member of the Manufacturing Circle, has five manufacturing operations in SA. They've been "requested" to reduce electricity use at their mills by 10%.
On top of this, load-shedding is becoming "a daily occurrence", she says.
With stage two load-shedding, they can at least confine the usage reductions to non-core operations. Once stage three load-shedding starts, this will be unsustainable.
"Production output will be curtailed, which will hurt their business significantly. They've had to do some quite hectic planning."
If Eskom's problem is a lack of coal then load-shedding is not a solution, she says.
"All that will happen is that industrial customers will try to catch up lost production once load-shedding has been lifted."
If it's a capacity problem then Eskom needs to call on more private generation.
Whether Eskom can be turned around is not a matter for debate, she says.
"We have no choice. So very urgent interventions are required. There needs to be a prioritisation of what is important to drive this country forward.
"So it's really a case of prioritising the importance of industrialisation and manufacturing, which are needed to create jobs and get us out of this vicious cycle we're in."..