Nersa grants Eskom 24,8% price rise
24-Feb-2010
Source: Mail & Guardian Online
For the following two financial years, Eskom was granted increases of 25,8% and 25,9% respectively.
Eskom applied for the tariff increase to help foot a R385-billion bill to build new power plants in the world's top platinum producer and a major producer of gold.
Eskom, which provides 95% of the country's power, has been battling an electricity shortage since January 2008, due to a lack of investment in new capacity and an ageing fleet of power stations.
Prior to this application, it had demanded a 45% hike over the next three years, but reviewed the application after strong protests from major mining companies.
Last year, Eskom increased its tariffs by 31%.
In January, Nersa held countrywide public hearings on the tariff application.
Bitter pill
Mpho Makwana, acting CEO of Eskom, told the hearing in Polokwane that South Africans should absorb the shock of the increase now.
"We know this is a bitter pill we are asking the nation to swallow, but we will all ultimately benefit," he told the hearing. Business Unity South Africa CEO Jerry Vilakazi told Nersa's hearing in Gauteng that if the increase was accepted by Nersa: "We can wave goodbye to an immediate recovery for South Africa's economy".
The Congress of South African Trade Unions, the South African Communist Party, the South African National Civic Organisation, the Young Communist League and the Treatment Action Campaign had all alleged that Nersa had already taken a decision to grant Eskom the 35% increase and the public hearings were only held to comply with the law.
Meanwhile, the South African Chamber of Commerce and Industry (Sacci) has estimated that a 35% hike could push inflation up by about 0,3%.
Sacci added that the hike would also cost South Africa about 500 000 jobs. -- Reuters, Sapa.
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