The electrical power crisis in South Africa and neighboring countries has sent ripples of unrest between the South African government and other national entities. According to Engineering News, the African National Congress (ANC) and the Congress of South African Trade Unions (Cosatu) issued a joint statement several days ago deeming Eskom’s request for a 53% tariff boost “not acceptable.”
The two organizations argued that the price increase would be unfair, and called on the government “to consider different options on how best the crisis could be handled moving forward.”
Public Enterprises Minister Alec Erwin stated that it would be better to take the costs early with the aim of safeguarding the utility’s financial stability as South Africa’s continued growth and development are dependent upon its continued solvency.
Engineering News points out that the country’s regulator will have a tough time resolving this issue because even if Eskom’s arguments are financially sound, it will be hard to push the price hike through if there is no political consensus.
Eskom submitted a request for a 53% tariff hike, citing the surging price of coal as the reason for the whopping increase. It also announced yesterday that it could be forced to cut back or even halt certain of its projects if it was unable to secure adequate revenues, which could only be achieved through a substantial increase in electricity tariffs
South Africa supplies the vast bulk of Zimbabwe’s and Botswana’s energy. Botswana, which did not hide its concern, expressed the hope that South Africa would stand by its agreements.
In recent months, various mining companies have also expressed their apprehension regarding the energy crisis, which is affecting their operations in South Africa. Another party to express its apprehension is NUM, the National Union of Mineworkers. NUM threatened to take mass action due to the fact that many of its members had been put on extended leave and it feared mass layoffs. NUM demanded the application of case-by-case consideration in the event of load shedding.
