Chamber slams Eskom's tariff application as 'arrogant' | Fin24
 
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Chamber slams Eskom's tariff application as 'arrogant'

Dec 23 2019 09:27
Khulekani Magubane, Fin24

The Cape Chamber of Commerce and Industry slammed Eskom for pursuing a tariff increase of nearly 17% from the National Energy Regulator of South Africa as arrogant and a show of contempt for ordinary South Africans.

Eskom recently announced a tariff increase application of 16.6%, saying it would need R27bn from consumers next year. Eskom is steeped in financial challenges, with a debt of more than R400bn. Despite the tariff application, Eskom has already received other forms of financial assistance.

In November, President Cyril Ramaphosa accented to a special appropriation bill which would grant Eskom R59bn over the next two years, which was already accounted for in Minister of Finance Tito Mboweni's medium term budget policy statement in October.

President of the Cape Chamber of Commerce and Industry, Geoff Jacobs, tore into Eskom through a statement, saying the power utility wanted to exempt itself from the consequences recent spates of load shedding, which reached stages four and six.

"Eskom's application for a 17% electricity tariff increase to compensate it for the millions of rands it lost by imposing the recent power cuts – marked a new level of arrogance and contempt for the public," said Jacobs.

Jacobs said Eskom behaved like a typical monopoly business, failing to adapt to new technologies and market demands, believing they cannot be rendered irrelevant.

Jacobs warned that technologies and energy alternatives would ultimately develop faster than Eskom could gobble up public funds and the utility would find itself irrelevant in the energy sector in the distant future.

"Just as email has dealt a body blow to letter writing, and cell phones are slowly but surely edging out landlines, there will come a time when massive state-owned power utilities run by overpopulated bureaucracies like Eskom will meet the same fate," Jacobs said.

Jacobs said it would be better for Eskom to immediately, rather than allow political thinking to trump economic reality, as that was the only way to stop Eskom's drain on the public finances as well as its weigh on the economy.

While it is unclear when NERSA would be able to consider the tariff increase application, which it published, City Press reported that it's unlikely that the energy regulator could approve it soon enough to influence the tariffs for 2020.

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