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Eskom comes down to 35%

By Tebogo Monama and Zukile Majova | Dec 02, 2009 | COMMENTS [ 0 ]

LABOUR federation Cosatu has opposed Eskom's proposed 35percent tariff hike.

LABOUR federation Cosatu has opposed Eskom's proposed 35percent tariff hike.

Eskom has decided to drop their proposed tariff increase from 45percent over three years to 35percent.

But Eskom said this meant that South Africans had to work together to save power.

Cosatu spokesperson Patrick Craven said: "We are not at all happy with that (tariff hike application). We feel that a hike of 35percent a year for three years is a huge burden to impose on consumers."

Craven said Cosatu would oppose the application at hearings to be conducted by the National Energy Regulator of South Africa.

"We have always argued that the capital costs at Eskom should come from taxation, not from the consumer. Among other options we have suggested a once-off-tax and we have also suggested a progressive tax to finance the Eskom projects."

But DA spokesperson on public enterprises Manie van Dyk said: "This is a landmark decision, and is precisely the sort of action that needs to be taken to inject private capital, and the greater efficiencies that go along with that.

"There are sure to be calls against such a move from narrow interests groups, but it is clear that this decision provides Eskom some breathing room for bringing down the tariff hike application to 35percent.

The revised application will translate into a price increase of 43 cents per kilowatt hour next year, 55 cents per kilowatt hour in 2011-2012 and 70 cents per kilowatt hour in 2012-2013.

The reduction also means that Eskom will have to sell 30percent of the new coal-fired Kusile station, the Sere wind project would also be phased by 12 months and the coal project (Coal 3) would be replaced by independent power producer projects. Nuclear projects would be delayed by 24 months.

"We have taken a decision to ask for a tariff increase that would take the country closer to security of supply and economic success, while keeping Eskom sustainable.

"However, we have had to ask ourselves pertinent questions as an organisation in terms of our role in the energy industry and our capacity to carry South Africa's energy needs into the future.

"The answer is that Eskom cannot do it all alone, hence the application comes with significant challenges that we have to manage together as a country," said Eskom chairperson Mpho Makwana.


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