Eskom's 16% hike necessary, says Gigaba

2012-10-23 15:39

Cape Town - Eskom's application for a 16% price hike over five years is vital to cushion the economy against a shock of a sudden tariff rise, Public Enterprises Minister Malusi Gigaba said on Tuesday.

Briefing the parliamentary committee on public enterprises, Gigaba was hesitant to declare whether Eskom's application to the National Energy Regulator of SA (Nersa) should be altered.

"I'm saying the 16% application is necessary... it might come down, but I hope it doesn't go up," said Gigaba.

Gigaba told MPs to await Nersa's decision, which would be made after a series of public hearings and consultations with interested parties, including business and trade unions.

The minister did, however, warn that if Nersa decided on lowering electricity tariffs significantly, it could have dire consequences.

"If it comes down, it must not come down to such an extent that the build programme will be impaired," Gigaba said.

He said the big debate over the coming months would be around whether the country could afford the tariff rises.

Gigaba said he had already engaged various stakeholders in this regard.

"We raised sharply the responsibility not to subject the South African economy to shocks of high tariffs increases, but at the same time in particular consider the poor."

Gigaba said changes to the inclining block tariff (IBT) were also contained in the Eskom proposal, to guard against unintended consequences for the poor.

"Poor households are losing out on the benefits because the IBT system is measured on consumption and not socio-economic conditions, meaning when poor households with multiple dwellings' consumption rises they are mistakenly charged higher tariffs," said Gigaba.

Gigaba said he would be directed by the outcome of the Nersa process as to the ultimate tariff, but hoped it would take various factors into consideration.

"We need to consider the build programme being undertaken and the risk of it being stalled by the inability of Eskom to raise revenue to pay its debts and loans."

Gigaba said it was still government's aim to bring tariff increases down to single digits following the next Multiple Year Price Determination.

  • merkwaardig.obskuur - 2012-10-23 15:59

    If an elephant sits on my head, whether there is a cushion between me and the elephant is irrelevant. The economy cannot support the increase, plain and simple.

      alf.pop - 2012-11-02 17:07

      Bu8t the increase isnecessary. Gigaba wants his cut and so do a few others! Thieving bastards!

  • Luke300 - 2012-10-23 16:06

    Didnt these morons already receive an increase of +/-25% for 3 years? Why is there another increase pending? This is what you get when you vote for the ANC!!!

  • Luke300 - 2012-10-23 16:08

    ANC logo - We want and will take all your money. We need to party, eat chicken and braai with whisky. We also need to entertain our many wifes.

  • peter.mokoena.31 - 2012-10-23 16:27

    They take a lot of money for personal things eg Nkandlagate and neglect to maintain things received in order from the apartheid regime, the roads are next, and expect the tax payer to pay their huge salaries and shouler these maintance. WTF

  • TshilidziPhuravhathu - 2012-10-23 16:38

    This cash cow is about to throw in the tawell, I cant take this any more...

  • dave.ducker.3 - 2012-10-23 16:38

    not one month has passed that I haven't lost power in the last year, sometimes for two to three days at a time!! your lucky I am still paying full stop, get you act together and your supply sorted out then you can talk. Oh yes and why are your top management still getting huge bonuses?

  • pieter.kunz - 2012-10-23 19:00

    Of course he will say eskom needs the hike.. Its goverment owned and that basically means more tax money... As it stands now i will need to look in selling my house in the near future as my utlity bill will be the same as my morgage if this trend continues.... Not to say the damage it will cause to business. My salary increases by 7-8% a year... Cost of living increases by 15-20% a year... Do the maths and we have less money...

  • steven.m.armour - 2012-10-23 19:24

    Get rid of the prawns running ESkom and get people in that know what they are doing.....Gatful for eskom

  • matt.cumming.77 - 2012-10-23 21:50

    Necessary? il tell you what was 'necessary'. How about your useless Department actually doing their job since '94 and not forcing all the costs through at once!

  • dadidwa - 2012-10-24 22:30

    @Merkwaargig I agree the tariff hike will have a negative effect on South Africa's economy. @KingPun Have you tried joining a residential or commercial programme aimed at enabling you to make your home or business energy efficient at little to no cost to you? this way you can beat the tariff hike. GenSave has a great programme .

  • trevor.leon.5 - 2012-11-02 05:35

    i will say it AGAIN! VOTE DA!!!!!!!!!!!!!!!!!!!

  • giancarlo.groenewald - 2012-11-02 16:26

    WE WILL NOT SUPPORT THE TOLLS AND WE WILL NOT SUPPORT THE INCREASE! It doesn't matter what the people supports you pay or you go to jail. All I can say is that I am going to use the training I get to develop a program to mess with your base of operations Eskom. Come on come to my house and get a fet klap.

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