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Chamber opposes Eskom tariff increase

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The Nelson Mandela Bay Business Chamber’s presentation to NERSA (National Energy Regulator of South Africa) at today’s public hearing in Port Elizabeth was cut short this morning by chanting and songs of support by local representatives of COSATU, echoing general sentiments against the proposed electricity price increase.

The Business Chamber, however, managed to convey successfully the bulk of its concerns regarding Eskom’s proposed 16% increase in electricity tariffs every year for the next five years, before the interruption took place.

David Mertens, Executive Director at Autocast SA, and Angus Clark, head of the Chamber’s Strategic Resources task team, put forth the business case against the hikes, citing significant adverse economic impact, especially in the manufacturing industry and commercial sector. The Chamber’s spokesmen cautioned the NERSA panel that Eskom’s proposed increase – coupled with unjustifiably high municipal mark-ups – would sound the death-knell for many businesses.

The Business Chamber believes that the viability of doing business in Nelson Mandela Bay is impaired as the competitiveness of local manufacturing facilities deteriorates against their global counterparts. Energy-intensive users are already at a point where jobs are being lost. Clark and Mertens warned of a catastrophic socio-economic domino effect into the Eastern Cape economy, hitting the poor the hardest.

The Nelson Mandela Bay Business Chamber believes that South Africa requires a national strategy regarding energy pricing for industry and business, and that Eskom’s return requirements must be reduced. Clark and Mertens recommend that energy demand management be expanded to reduce peak cost, and advocate an end to discriminatory pricing between Eskom Direct customers and Municipal customers. The Chamber recommended an increase at a maximum of 10%, in line with recommendations by the Energy Intensive User Group (EIUG) and Business Unity South Africa (BUSA).

“Representing the interests of business in the Nelson Mandela Bay Metropolitan area, the Nelson Mandela Bay Business Chamber rejects Eskom’s proposed MYPD3 16% electricity tariff increase over the next five years,” says Chamber CEO Kevin Hustler. “The proposed increase will have a significant adverse economic impact to the continued survival of the manufacturing industry and commercial sector in this region. We will face a catastrophe based on the loss of jobs and a downward spiral in the Eastern Cape economy.”

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Port Elizabethan

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