Power hikes ‘will slash growth, jobs’

Business Report 3 November 2012.

Eskom’s planned price increases of 16 percent a year for the next five years will slash economic growth and chase jobs from South Africa to India, China and Russia, MPs heard yesterday.

This was the message from Energy Intensive User Group chairman Mike Rossouw. He presented figures to Parliament’s trade and industry oversight committee, which is holding public hearings on the proposed increases, showing how in 2008 South Africa’s average electricity costs were the lowest among fellow silicon smelting countries such as Canada, the US, Brazil, France and Norway.

But by last year South Africa had the highest electricity rates for silicon smelters in the group.

South Africa’s ferrochrome production, among the most competitively-priced in 2008, was by last year by far the most expensive.

He was emphatic in saying no companies represented by the Energy Intensive User Group would survive Eskom’s proposed increases, calling for independent power producers and competition to ensure efficiencies.

Municipalities were also criticised for loading fixed charges.

In Johannesburg, the municipality adds a 702 percent charge on electricity, while the City of Tshwane adds a 692 percent charge. In Cape Town the charge is 336 percent.

The SA Municipal Workers Union has rejected the price hikes, characterising them as “daylight robbery”.

Peter Haylett, chairman of the Cape Chamber of Commerce’s industrial focus portfolio committee, said the next increases would be “a fatal blow to some” and would cost jobs.

Independent on Saturday

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