The South African SMME Forum has lodged documents with the National Energy Regulator of South Africa to register its formal objection against Eskom’s application for substantial electricity tariff increases.
The forum said in a statement on Monday that it believes the proposed increases are not only unjustified but also inimical to sustainable growth of the small, medium and micro enterprise (SMME) sector.
“Eskom’s application and subsequent conduct amounts to nothing short of business vice and extortion of the worst kind. Not content with the already-approved above-inflation 14,2% increase, Eskom seeks to exact further financial embarrassment to its already hard-pressed consumers, especially small businesses and the indigent,” it said.
“In its application Eskom claims, inter alia, that it is facing imminent substantial financial challenges — including reporting financial losses in its operations — should the regulator not confirm its proposed price increases.
“What Eskom fails to consider is the potential financial losses by small businesses and the concomitant loss of employment as small businesses are forced to lay off workers due to unaffordable input costs (electricity) and the intermittent forced shutdowns occasioned by Eskom’s power conservation programme otherwise referred to as ‘load-shedding’,” the forum said.
By its own admission, Eskom submits that “the high electricity price increase will have a definite impact on the economy, especially on the indigent without appropriate intervention”.
The forum, a public benefit organisation, said it is forced to intercede to stop Eskom in its tracks and seek alternative ways of funding its capital-expenditure requirements.
“Otherwise such high prices, if confirmed by the regulator, will have a substantial negative impact on the survival and growth of the local small-business sector, which already experiences some of the highest comparative costs of doing business in the world,” it said.
“Whilst we sympathise with the projected precarious but self-inflicted financial position of Eskom, the forum implores on Eskom to first look at improving its own internal cost efficiencies and global competitiveness instead of further milking its customers.
“We are convinced that Eskom should be in a position to realise substantial savings through load-shedding most of its unnecessary and wasteful expenditures, including its numerous white elephants.
“In the event that there is still a need for external funding of its voracious capex, Eskom need look much further than its single shareholder who has gleefully been the sole recipient of dividends over the years without making reserves for such eventualities,” it added.
Furthermore, the forum will shortly lodge a formal complaint with the regulator against Eskom for the manner in which its unilateral load-shedding and demand-side management adversely affects small businesses and the indigent for the benefit of large, industrial and affluent consumers of electricity.
“Eskom’s actions in this matter lack transparency and [are] designed to mask its operational inefficiencies,” the forum said. — I-Net Bridge