Cape Town - While President Cyril Ramaphosa has asked Eskom to hold off on the 18.65% electricity increase set to be implemented in April, experts in the energy sphere believe that if Eskom does not increase tariffs, it will not be able to rehabilitate the energy infrastructure in the country.
The president made these comments in his closing address at the Free State ANC’s provincial conference on January 22, after previously stating that his “hands are tied” about the incremental financial burden that would plague citizens.
Presidential spokesperson Vincent Magwenya told the Cape Argus: “The matter is still under discussion, so I can’t comment any further. However, the president is very alive to the hardships faced by ordinary South Africans, households and small businesses.
“He is also equally mindful of Eskom’s funding deficit. Therefore, what he is seeking is some form of balance in the manner and timing in which the tariff increase is applied.”
Eskom reminded the public that in terms of legislation, the National Energy Regulator of South Africa (Nersa), an independent regulator, was the only authority that determined the price of electricity to be charged to customers and it underwent an exhaustive public participation process before deciding on this tariff.
The president’s intervention has been met with heavy criticism by some energy and political experts who believed this was a belated political ploy ahead of elections to regain credibility with the people.
Professor Anton Eberhard, an energy expert and director of Power Future Labs at the University of Cape Town’s Graduate School of Business, said: “I have seen this so often across Africa. Presidents block electricity price increases before elections, governments don’t make the utility whole, capex gets deferred, then maintenance and electricity supply deteriorates further.”
Political economy analyst Daniel Silke told the Cape Argus that it seemed as though the president was simply trying to capitalise and electioneer by expressing a desire to see the Eskom tariff dropped.
“To me this is a political ploy, the ANC is finally understanding that it is receiving tremendous resistance on the issue of load shedding, and the double whammy of the tariff increase.
“Eskom requires emergency assistance from the State and to ask the South African public to pay for the disastrous financial state the company is in, is an insult to all South Africans,” Silke said
Silke added that the ANC was going to feel the effect of allowing higher electricity tariffs at the polls unless the matter is partially resolved.
DA energy spokesperson Kevin Mileham said: “The president is simply buckling to the pressure that the DA and other elements of civil society are placing on him.
“A few days ago, he said his 'hands were tied’ when it comes to the tariffs – now it appears that he is feeling the outrage of South Africans who have to pay more for electricity they are not receiving.”
Cameron Dugmore, ANC leader in the Western Cape legislature, said: “We must remember that both Eskom and Nersa are independent entities and President Ramaphosa acknowledges and respects this independence.
“However, after hearing of the justified outcry in response to these increases in tariffs, President Ramaphosa must be commended for raising these serious concerns with Eskom.”