Eskom has no economic bright sparks: iLIVE
Eskom is a bully that doesn't understand monopoly capitalism in a developing nation ("SA's R300bn bill to keep lights on", yesterday).
Its request to the National Energy Regulator of South Africa for an annual increment of 16% for the next five years is not only reckless, but absurd and counter to development and growth.
Companies will divest when they realise their operational costs are way beyond their marginal and revenue costs.
Should they decide to continue in business, then the cost of production will be paid for by consumers, who are already in deep financial trouble.
Should consumers cut back on their lifestyles (as we are told to tighten our belts), this will sadly have a huge impact on employment as production will have to be reduced to cater for the fewer consumers still willing to buy goods.
Consumer spending has been the lifeblood of the US economy since the 1960s.
The local middle class, including the black diamonds, is likened to the baby-boomers who were responsible for the growth of the US economy due to their positive outlook in life and their penchant for spending on consumer goods, thus stimulating the economy.
Credit facilities and unsecured loans have made it easy for many in the middle class to continue to spend (beyond their means) to stimulate our economy, but such explicit abuse of their courtesy by the government through back-door taxes such as e-tolls will result in economic depression rather than growth.
Three years ago, Eskom requested a 25% increase (national inflation rate being 5% to 6% and most salaries growing at an average of 7.5%, meaning consumers had to borrow to cover the cost of electricity). Now it wants more.
Didn't it base its request three years ago on future prospects, investment and financial sustainability?
Nersa must say "no" to this absurdity by Eskom and must halve Brian Dames and his executives' salaries.