Lights out?

The last time we took a look at the South African market, all concerned were filled with seemingly boundless optimism about the prospects for the AV industry and the uplift expected from the 2010 FIFA World Cup, but a lot can change in nine months…

There’s real risk that the economic progress made by South Africa in recent times could all be lost due to a lack of investment in basic infrastructure. What was intended to be a discussion with consultant and AV designer Gavin Olivier, proprietor of Digital Fabric about the South African AV market, was quickly diverted when I learned that for the last 6 months or so his country has been suffering from a significant electricity supply crisis.

“It’s a real problem, all hell broke loose over December last year, when it came to light that Eskom, our generation company, hasn’t done any maintenance for 15 years. And instead of building more power stations, in order to facilitate the phenomenal growth we’ve been enjoying, they in-fact mothballed two so there’s an enormous problem.”

In order to buy time for Eskom to fix the problem, the company initiated a controversial schedule of load-shedding, which essentially means scheduled power cuts at pre-determined times. However, this policy has since been questioned by many who argue that on-off supply in fact further damages the countries ageing distribution infrastructure. At the same time the company has been accused of continuing to export electricity to South Africa’s neighbours during a period when power is in short supply at home.

“It’s only just getting becoming reasonable in that they are sticking to their schedule of load-shedding at last. So you know that you aren’t going to have power for Wednesday morning, or Thursday morning,” explains Olivier.

“The reason it’s been so damaging to the commercial sector, other than the obvious loss of productivity, is that the people in charge have said that this isn’t a problem they can fix within a year or two. They have called publicly for a moratorium on all new major capital projects until 2013. I have to say that it has been getting better, but you never know day to day what is going on. I do think it’ll be fixed sooner than they say.”

Asking how an unreliable power supply impacts on business seemed like a pretty stupid question in the circumstances, but Gavin seems philosophical about things: “Everyone’s just gone out and bought diesel generators.”

All these things just have a knock on effect on the economy, increasing fuel costs have lead to double-digit inflation, which itself has lead to higher interest rates.

“South Africa is a bit of a weird place the moment,” muses Olivier. “There are a good number of people in the country who believe that the FIFA World Cup could be taken away from us.”

Given the amount of public and private money invested on the basis of the presence of the tournament being held in South Africa, there’s a danger that such a decision could push the economy over the edge, a point I put to Gavin.

“There’s no question that there’s a very real risk. We’re halfway through building four or five new stadiums, that’s billions of rand, just for the World Cup. We don’t need any new stadiums for our own use so there is a lot of capital expenditure on things that would hurt quite badly. The honest truth is that because of the uncertainty and the current climate, between power and politics, people are just keeping their powder dry in terms of spend for 2010. So the things that you might expect like attractions, and visitor entertainment are just not happening at the moment. That’s having a direct impact on my business.

“Whilst this is all speculation at the moment the point is that if it’s in people’s minds then it impacts on their behaviour.”
It’s easy to get sucked into the idea that the sky is falling on South Africa, but it hasn’t yet and Gavin still says that he is receiving a number of inquiries for new work.

“I’m busy working on a 4D theatre project for one of the local aquariums, and there’s a good number of museum projects in the planning phase. There’s also a lot of interest in up-Africa. I’m aware of, and involved in, a couple of projects in Ethiopia and Ghana. I think a lot of South Africans are looking at up-Africa at the moment, as well as Dubai.“

“There are two groups of people in South Africa at the moment. There are those who’ve had enough and are trying to leave. And there are lots of them. An exodus of professional people is taking place. I’m talking about people with families who want to raise their kids elsewhere.

“Then you’ve got the other half, who are saying ‘I think it’s going to be ok in the long term, we’re into a rough ride, but we just have to look for other devices to survive in that period and we’ll be ok.’ It’s those of us who are looking at up-Africa and Dubai for business. You do what you have to do.”

This can-do attitude is what will see the country through the on-going problems. And trying to remain positive we turned to a subject that is definite cause for optimism – InfoComm’s concerted effort in the country to improve standards, an effort that Olivier has been involved in promoting himself.

“For me training has always been a must, I think this is a tremendous thing, the best our industry could possibly have. They’ve been doing a formal, face-to-face version of the online training that has been previously available. They’ve also been doing the compulsory training that you need to get to CTS certification. The actual goal here has been to get more CTS certification in place. The sessions have been well attended, particularly by the corporate audiovisual guys.”

Digital Fabric is heavily focused on the visitor attraction and communications sectors, and I also asked Gavin what he has been finding most benefit from recently.

He reported a great deal of interest in both 3D and 4D type environments, as well as anything interactive – touch screens, overlays, floor systems, camera motion tracking systems. This kind of technology is relatively new to people in South Africa in the cultural or leisure type installation. The reduced entry-level cost of HD resolution is also making life interesting for projection-based solutions.

And the final verdict? Well considering the difficulties his country is facing right now Gavin is a remarkable optimist, something be applauded.

“I think that the way the 2010 world cup plays out will affect us in some way or another, I’m not sure how exactly. When you and I last spoke 2010 was definitely something that everyone was optimistic about. Now almost every one of us has discounted it, if it happens it happens if it doesn’t it doesn’t but we’re not relying on it for business any more. The final answer I think is still very positive. There will always things going on, there will always be business. Some sectors of our market are still busy - the corporate sector is very busy. There’s always work, sadly it might not be the kind of work that we were hoping for, but there is always work. It’s just a question of hanging in there and maybe working a little harder, “ Olivier concluded.

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