'Hike is good for SA'

SOUTH Africans are once again being asked to cough up to fund Eskom's shortfall of R17billion, which will balloon to R54,3billion by 2012.

Yesterday Eskom chief executive Jacob Maroga attempted to convince the National Energy Regulator of SA (Nersa) that its application for a 34 percent hike in electricity prices was in line with the aspirations of all South Africans rather than in the interests of Eskom.

This year's application follows an increase of almost 36 percent last year, although Eskom had asked for an increase of over 50 percent.

In the face of a small group of protesters and 170 submissions to Nersa by other interested parties (of which one was a positive response), 25 of which will give oral submissions, Maroga said the parastatal's application "should be seen as a country application which requires a country dialogue" and that Eskom was not asking for itself, but for all South Africans.

"This is not about a 34 percent for Eskom . it must be driven by the aspirations of South Africa first rather than the interests of Eskom."

Speaking at the beginning of a two-day hearing at the Council for Scientific and Industrial Research convention centre in Pretoria, Maroga said the 34 percent was based on current economic conditions, the tight electricity supply and Eskom's higher costs, not only for the production of electricity but also for its massive programme to increase electricity supply by building new power stations, to cost it close to R400billion over the next five years.

Maroga said that reserve margins "are well below industry standards and leave no room for surprises", ageing plant is being run longer and harder than designed for, and the window of opportunity for doing maintenance is becoming tighter and tighter.

He said operating costs "are increasing at a more rapid pace then ever experienced".

This 34 percent hike is likely to be followed by another application for the next financial year.