Six reasons why Nersa should turn down Eskom: DA

22 June 2015 - 15:00 By Rdm News Wire

Government’s War Room in December may have produced a “Five Point Plan” aimed at solving the electricity crisis‚ but the Democratic Alliance (DA) on Monday came up with six reasons why Eskom shouldn’t be granted its proposed hiked electricity tariffs. The party’s announcement comes ahead of this week’s National Energy Regulator of South Africa (Nersa) hearings into the utility’s 25.3% tariff increase application for the 2015-16 financial year. Topping the DA’s list is the “economic impact” it would have as “economic growth is stagnant‚ unemployment is increasing‚ inflation is accelerating and the currency is in decline”. Secondly‚ the party says the “increase will kill jobs” as the “impact…is particularly acute for small‚ medium and micro-sized enterprises who…are the driving force behind job creation in South Africa”.John Liebenberg Thirdly‚ that Eskom is in need of “constant government bailouts to stay afloat is…indicative of major structural challenges that can’t be addressed by merely raising tariffs”.The official opposition also has an issue with “secrecy surrounding fuel contracts”‚ as “Eskom still refuses to make critical information” about these available to the public and there is “speculation that Eskom is paying well in excess of the retail prices for its fuel in order to enrich well-connected African National Congress cadres”. The fifth reason Nersa should turn down the hike is that “Eskom makes the misleading claim that its request for an additional tariff increase stems predominantly from unforeseen fuel costs arising from the purchase of diesel to minimise load-shedding”.Instead‚ the DA said‚ the “reliance on diesel stems from mismanagement‚ cost over-runs‚ and delays in the construction of Medupi and Kusile” power plants. The final argument from the DA is that Eskom should “seek funding from the private sector through the sale of an equity stake in Eskom” to strengthen its “financial position‚ introduce skilled board members to the parastatal‚ and improve overall management of Eskom”.“It is the DA's considered opinion that while the proposed tariff increases may be good for Eskom‚ they are clearly bad for the economy‚” the party said.The DA’s shadow energy minister‚ Gordon Mackay‚ will make these submissions to Nersa on Tuesday.-RDM News Wire..

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