Wednesday, March 25, 2015

Cape Chamber of Commerce: Tariff hike unlikely to save Eskom

Oscar Thomas
25 March 2015

The Cape Chamber of Commerce said Eskom’s plans to increase electricity tariff will not resolve the power utilities problems.

Cape Chamber President Janine Myburgh said over a period of six years primary energy costs increased from R19 billion to R70 billion.

That was an annual increase of 24.3 percent which is roughly four times the rate of inflation.

Myburgh said a quarter of Eskom’s generating capacity is off-line undergoing maintenance or being repaired after breakdowns yet the costs continue to rise.

Myburgh said over a period of six years primary energy costs increased from R19bn to R70bn. That was an annual increase of 24.3% which is roughly four times the rate of inflation.

“We need to ask some serious questions about these costs because there are allegations that Eskom is paying something like four times the going rate for coal from some BEE companies” Myburgh added.

Meanwhile the Congress of South African Trade Unions has vowed to action should Eskom raise the tariffs in April.

Cosatu spokesperson Patrick Craven said it is clear that the extra costs have nothing to do with unavoidable factors.

Last week, the power utility announced a 25 percent tariff hike to help cover the cost of diesel used to operate gas turbines, which helped prevent load shedding over the past year.

Craven said that if its submission to energy regulator Nersa to reject Eskom's application for a further tariff increase fails, the trade union federation would consider rolling mass action.

Craven said it should cut fat, drastically improve its revenue collection capacity and manage contracts effectively to address its financial problems.

Craven said Government as the shareholder must also intervene in a big way to help Eskom out of its financial problems.

“It is unfair for municipalities to put a huge mark-up on top of the Eskom electricity tariff, making electricity unaffordable for many poor households, and then fail to pay Eskom” Craven added.

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