Eskom's 34% price hike slated

Johannesburg - The Congress of South African Trade Unions (Cosatu) said on Friday that it is "totally opposed" to power utility Eskom's proposed 34% electricity tariff increase and urges National Energy Regulator of South Africa (Nersa) to reject it.

"Such a massive increase would inflict misery on thousands of poor households, especially as there is not yet a tariff policy that protects poor consumers, many of whom would have to give up using electricity at all, faced with such a rise in their cost of living," says Cosatu.

It adds that a 34% increase would also hit hundreds of small and medium businesses who are already struggling with the effects of the global financial crisis.

"Many might be forced to close their doors and retrench workers, further exacerbating a trend towards recession which is already under way."

Cosatu reiterated that while it is not opposed to an increase that just reflects genuine increases in running costs, which should correspond to the current rate of inflation of 8.5%, consumers should not have to shoulder Eskom's capital cost of building new generating capacity.

"This must come from government, who failed to provide these funds in the late 1990s despite Eskom's warning that there would be a crisis if they were not given the money at that time," says the union.

Cosatu says labour will continue to discuss these issues in the National Economic Development and Labour Council (Nedlac) and will strive to reach an agreement with government and business, but cannot rule out further mass action should an excessive tariff increase be imposed regardless.

- I-Net Bridge