Reserve Bank Governor Tito Mboweni on Tuesday proposed a "once-off tax" rather than a tariff hike to help Eskom build capacity.
"I'm quite certain that if we took a vote here 100% of us would agree to a once-off tax just to build the capacity of Eskom. As long as it was a once-off and not repeated again and again," Mboweni told a conference of the Road Freight Association in Vanderbijlpark.
Mboweni said industrial policy and structural reforms were necessary for any nation's recovery from the global economic crisis.
"In our case what we can do to develop the industrial zones that we have in this country?
"We shouldn't forget those structural reforms which are necessary. Structural reforms can contribute to better competition and lower inflation," said Mboweni.
"When my colleagues at Eskom say they would like to increase the energy tariffs by the kind of margin that they're talking about it doesn't help very much with structural reform."
While Mboweni said he agreed more power capacity was needed, he added a tariff hike would not benefit the industry.
"None of us want to experience [Eskom's power failures] again and somebody has to pay for the construction of the new capacity," said Mboweni.
Eskom had proposed to increase its tariffs by 34% this year. The utility said the increase was necessary to build capacity to satisfy South Africa's electricity demands.
Eskom spokesperson Fani Zulu said on Friday the utility would need R274bn over the next three years. Of this, R141bn would be provided by loans.
Zulu said Eskom's current financial model only allows it to use tariff rates for running costs, not building capacity. "Once it [a new financial model] is developed and implemented, we can apply for [a tariff hike, for] the full three years," Zulu said.
He added that there was a "strong consensus" that capacity building would be needed for economic growth.
"You can't talk about growth and development without giving the necessary power supply," said Zulu.
Lee Rigby - RIP
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*Lee Rigby has been identified as the man who was attacked and killed by
two coward Islamists yesterday. He was a 25-year old married father and
Afghan vet...
1 hour ago
6 Opinion(s):
Would be nice if we taxpayers had a say in who is running Eskom.
The AA guys they had did predictable not scrape it.
The problem with one-offs is that they are only "one-off" until the next one-off. SAA has been getting "one-offs" for years.
@WHITEADDER: Exactly. Since when is the president of the reserve bank the minister of finance as well? What happened to Pravin Gordhan, or is he just another stooge?
@Doberman: AA works and pigs can fly in South Africa.
So what have Eskom been doing with the money we've been paying them for the last 15 years? Coz they certainly haven't been using it to invest in infrastructure... and now that the chickens come home to roost, they want more money?
This is all very well and good (that is if you believe all the tripe), but what about the hundreds of thousands using electricity without paying for it.
I understand subsidies for certain people living below the poverty line, but how can you possibly continue to provide free services whilst border control is non-existent?
Isn't that where some of the money has gone which was supposed to maintain and develop the infrastructure?
And I wonder how many municipalities owe the utility provider how many millions, because corrupt hands there got hold of the funds before it could even be mismanaged at Eskom.
Islandshark now there is the million dollar question. Think of all those Zimboonians crossing the border who will all need electricity, water healthcare and work it out from there.
At the rate they are crossing, the power systems will again grind to a halt.
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