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22 Jun 2015 16:01
Cosatu has argued that consumers cannot bear the burden of Eskom's bad leadership decisions. (Fredrik Lerneryd)
It is rare for a trade union federation and a liberal party to agree, but when it comes to the staggering electricity tariff increase proposed by Eskom, even enemies are nodding in
Trade union federation Cosatu and the
Democratic Alliance have made submissions to the National Energy Regulator of
South Africa (Nersa), rejecting Eskom’s proposed tariff hike of 25.3% for the 2015-16 financial year.
Both Cosatu and the DA have agreed that South African electricity
consumers simply cannot afford to pay an additional quarter of their bill.
Nersa is expected to make a final decision on the increase by the end of
In a press conference held in Johannesburg on Monday, the DA said the
proposed tariff hike would be terrible for the economy.
therefore vehemently oppose any tariff increases in the coming financial year
while our economy continues to suffer from constant load shedding as a result
of the mismanagement of Eskom,” said DA shadow minister for energy Gordan
The party said the energy crisis has resulted in job losses and has
already cost the country billions of rands.
Both the DA and Cosatu said with the current economic stagnation in South
Africa, the proposed hikes are unaffordable.
“We argue that 36% rate of unemployment, 1.3%
GDP growth in the Q1 (first quarter) of 2015 and the fact that more than 50% of
South Africans are living in poverty doesn’t warrant electricity hikes,” Cosatu
said in its submissions to Nersa.
The DA’s Mackay argued that the hikes would
kill job creation.
“The impact of tariff increases is
particularly acute for small, medium and micro-sized enterprises (SMMEs) who
have limited capacity to absorb higher costs,” he said.
Eskom’s woesThe DA also raised concerns about the
running of Eskom.
“Despite these increases it [Eskom] has still
failed to stabilise its financial position and requires constant government
bailouts to stay afloat,” Mackay added.
In February this year, President Jacob Zuma
announced that government would
give Eskom a R23-billion bailout in an attempt to stabilise its
Aside from financial trouble, Eskom is
battling to keep the lights on by not generating enough electricity to meet the
The cherry on top of Eskom’s woes is its
“South Africans deserve proper leadership to get us through the crisis we
are facing,” the DA bemoaned.
Cosatu further argued that citizens cannot
bear the burden of bad leadership decisions.
“We argue that
the problem Eskom is facing is due to its failure to maintain the plants and to
commission the new power stations on time; the working class cannot therefore
pay the price for Eskom’s inefficiencies,” Cosatu’s industrial policy co-ordinator
Jonas Mosia said in a statement.
Privatisation debateHowever, where Cosatu and the DA disagree is
on what should happen to Eskom.
The DA has called for its privatisation, saying there should be a sale of
an equity stake in Eskom.
“Such a stake will raise billions of rands,
strengthen Eskom’s financial position, introduce skilled board members to the
parastatal and improve overall management of Eskom,” Mackay said.
Cosatu has rejected the privatisation of Eskom
– its stance is that “government, as a shareholder, has a responsibility to
The debate around privatisation has been raging within the ANC-led
tripartite alliance for some time.
ANC secretary general Gwede Mantashe said the party has been
debating whether government should consider the Chinese option of financing
Following a national executive committee meeting
last month, he said that in China, government had
capitalised several of its state-owned enterprises by taking around 30% to 40%
of a state-owned enterprise, listing it and retaining its 60%, as a way to
capitalise the institution.
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