Eskom going ahead with massive price hike

It's all over bar the shouting as far as Eskom's price hike is concerned. Raising capital via foreign investors is not possible because of our lousy bond ratings, and it's not possible via a once-off tax hit because nobody in their right mind believes that such a tax would be a once-off. So it's a case of slowly bleeding the paying consumer to death. Vavi knows by now when to keep his mouth shut, and one wonders to what extent Cosatu is shadow boxing while knowing very well that none of their protests will work anyway.

Pretoria - Eskom's application for a 34% price hike is for the benefit of South Africa, the parastatal's chief executive Jacob Maroga said on Monday.

"This application should be seen as a country application which requires a country dialogue," Maroga told the National Energy Regulator of SA's (Nersa) public hearings into the tariff hike application.

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

Eskom"s application has raised the ire of civil society and labour movements, many of whom would present their arguments during the two-day hearings at the CSIR convention centre in Pretoria.

Nersa has received 170 submissions on Eskom's application, 25 would be heard during the course of the hearings.

Maroga described the economic climate as "extraordinary".

"These are extraordinary times and they have an impact on us," he said, referring to the global financial crisis causing countries across the globe to tighten their belts.

The global financial system coupled with the country's transition from an era of "abundant and cheap electricity" to "constrained reserve margins and an increase in costs" were highlighted as key contributors to the parastatal's application.

Eskom's aim was to contribute to the growth of democracy and the country's economy.

"We want to make it our business to contribute to democracy in South Africa to contribute to a thriving economy.

"We want not only to have power available but have power available all the time. Power is like oxygen to the economy," Maroga said.

The parastatal needs funding for the "biggest capital expansion programme" the country has seen - with R385bn being spent over the next five years.

- Sapa