South Durban sees red over Eskom’s proposed 15% hike

Date: Jan 23, 2019

WHILE electricity parastatal Eksom seeks to hike South Africa’s electricity tariffs by 15% for each of the next three years, civic organisations such as Organisation Against Tax Abuse (OUTA) and the South Durban Basin’s own South Durban Community Environmental Allaince (SDCEA) are strongly contesting the bid.

On Monday, 14 January, the National Energy Regulator (NERSA) started public hearings on Eskom’s fourth multi-year price determination (MYPD4) of electricity tariffs for the three years from April 2019 to March 2022.

In presenting OUTA’s main reasons for its opposition to the increases, it said Eskom’s latest request for an exorbitant increase comes on the back of more than 500% increase in tariffs over the past 11 years, which has had a detrimental effect on the cost of doing business and living in South Africa. 

This is largely due to poor leadership, political meddling and corruption which has permeated the largest state-owned entity and caused a rapid rise in operating costs (primary energy and employee expenses) and debt, which rose from R35bn in 2007 to more than R400bn today.

“OUTA cannot accept such high tariff hikes at this stage, despite the fact that Eskom is broke,” says Ronald Chauke, OUTA’s portfolio manager on energy. “At best, we propose NERSA should not allow Eskom to exceed CPI, which is around the 5% mark, but instead Eskom should find savings by reducing the headcount and staff costs, along with returning to lower primary energy costs by undoing the inflated and often corrupt contracts entered into during the Jacob Zuma era,” said Chauke.

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