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Johannesburg - While business leaders have welcomed the certainty a lower-than-proposed electricity price increase brings, many fear it may threaten the economic recovery and "devastate" the poor.
The National Energy Regulator of SA (Nersa) has granted Eskom a 24.8% fee increase for this year, a 25.8% increase for next year and 25.9% in 2012. Eskom demanded a 35% hike per year.
The South African Chamber of Commerce and Industry (Sacci) said the increases matched general expectations from business but are still fairly high, given current economic circumstances.
"This decision should diminish scepticism concerning the continued sustainable electricity supply in South Africa," it said.
"Notwithstanding the certainty that is given by this decision, Sacci estimates that approximately 250 000 jobs will be lost as a consequence and it will be a factor in CPI [consumer price index] remaining outside the target range," it said.
Cosatu has reacted with "anger", threatening to mobilise its members for a national strike.
"Many businesses, which are already struggling to survive, will not be able to afford such a massive increase in one of their biggest running costs. Jobs could be lost, fewer new jobs will be created and many firms may even be forced to close down.
"Individual consumers, especially the poor, who pay more per unit than the big wealthy users, will be hit hard at a time when they are struggling with other rising costs," the trade federation said.
"We shall insist that government, and not the poor consumers, should bear the cost of Eskom's capital expenditure on new infrastructure, which their predecessor failed to provide in the 1990s when Eskom warned that this money was necessary."
But the DA put the blame firmly on the government.
'Refusing to deal with the problem'
Manie van Dyk, public enterprises spokesperson, said consumers are being made to pay for the failures of the ANC government.
"The ANC government had ample opportunity to act. Instead, they sat by idly - first, by refusing to build new power stations, then by refusing to deal with the festering maladministration within Eskom.
"Instead of getting rid of their poorly performing cadres, they have protected them to the hilt. Jacob Maroga, as we learnt from court papers yesterday, is viewed by Eskom as 'dishonest' and as having 'failed to perform his duties'. Yet the ANC went to extraordinary lengths to protect him - in the process managing to effect the resignation of the highly-regarded Bobby Godsell."
The National Education Health & Allied Workers Union (Nehawu) has also said it is angered that the people of South Africa are being made to pay for the mistakes of bungling administrations "and we are disappointed that the current administration has failed to cushion the poor people of this country by financing Eskom's capital expenditure".
'Respecting the necessary increase'
For its part, Energy Minister Dipuo Peters said government "respects" the "necessary" immediate increase of electricity tariffs approved by Nersa.
"It has become necessary to conclude the price path for the electricity industry in order to eliminate the uncertainty around the funding of the capital programme for the sector," Peters said in a statement on Wednesday.
"This has become even more urgent particularly given the fact that there are indications already that we are coming out of the recession as indicated in the figures released this week."
Eskom itself is "currently studying the full details of the determination and is in consultation with key stakeholders".
"We will make further comment on the determination and its specific implications," said acting chairperson Mpho Makwana.
Sacci said it remains committed to the view that there are more affordable alternatives to sustainable electricity supply.
"We will continue to explore such alternatives with Eskom and other stakeholders. One such solution relates to the introduction of the independent systems operator which must be fast-tracked so that private sector participation in generation can be accelerated."
- Fin24.com, I-Net Bridge and Sapa
