Loading...
See More

FMF: SA needs independent grid

Nov 13 2012 14:42 Sapa

Related Articles

RFA welcomes lower toll tariffs

State, power producers sign contract

Govt to sign first IPP contracts

Manuel appointed to World Bank panel

Zim jumps on township tourism bandwagon

Poland to pump €15.5bn into shale gas

 
Johannesburg - South Africa needs an independent operator in the electricity sector, the Free Market Foundation (FMF) said on Tuesday.

A single grid owner and operator, South Africa's current model, resulted in a lack of competition, FMF director Eustace Davie told reporters in Johannesburg.

This created the potential for excessive charges and difficulties in gaining access to the grid. A better scenario would see an independent system operator created to buy power from competing countries, said Davie.

Allowing Eskom to go ahead with its 16% tariff increase application would be disastrous for the economy, he said.

"There is a price tsunami that's about to hit the country, and it's going to carry on for four or five years."

Firms would close down because they could not afford electricity, he warned.

The FMF is a lobby group advocating for less government intervention in the economy.

Davie questioned figures contained in Eskom's latest multi-year price determination for the next five years (MYPD3).

The submission provided for a return to government of R186.8bn over the period, which the government should forego. Eskom's depreciation costs had also been calculated at the current replacement value of assets, rather than their historic value. This had added a further R279.5bn to Eskom's revenue requirements.

He questioned the need for R13bn to be spent on integrated demand management, a programme which, he said, included the cost of buying back power from large energy users.

"Independent experts, technical and financial, must interrogate the figures contained in the MYPD3," Davie said.

"The matter is too important to be decided upon without thorough investigation."
free market foundation
NEXT ON FIN24X

 

Lastest Articles

Here is how to check your credit score and manage it Read More...
Top tips to save money over the festive period Read More...
These are the top 5 most fuel efficient cars in SA Read More...
What to consider when switching medical aid schemes Read More...
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
12 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

Brought to you by BizNews

More from BizNews

We're talking about:

Small Business

Retailers of any shape and size can now unlock the power of mobile transacting.
 

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...