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KZN ratepayer associations, residents reject Eskom’s 20,5% price hike

Picture: Dumisani Sibeko

Picture: Dumisani Sibeko

Published Jan 21, 2022

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Durban: Ratepayer associations and residents have slammed Eskom’s move to increase the price of electricity, saying they cannot afford the hike.

They are also objecting because of the shoddy service provided by the utility.

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The National Energy Regulator of South Africa (Nersa) recently invited stakeholders to comment on Eskom’s proposed 20.5% tariff increase for electricity.

Calib Cassim, Eskom's chief financial officer, said in a statement that the power utility had applied to Nersa for the 20.5% hike for the 2023 financial year, to kick-in from April 1.

Reacting to the announcement, Sunildutt Ramdhar, the chairperson of the Isipingo Ratepayers Association, said: "Most residents are struggling to buy food due to unemployment, job losses, salary cuts as a result of Covid-19 and the unrest in July. If the government agrees to this hike, municipalities will find more residents will be in arrears."

"In Clare Estate service delivery is non-existent. We have daily electricity outages as a result of illegal connections. Our food spoils and we are not compensated,“ Navin Dookran, the chairperson of the Clare Estate Ratepayers Association, said.

"To ask people like us to pay more than 20% is a slap in the face. Before hiking the price, Eskom, government and our municipality must show us what they have done in the last five years to improve the electricity service."

Alice Govender, from the Phoenix Ratepayers Association, said: "In Phoenix, there are many families who cannot afford food. How will they now pay more for their utility bills?"

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Dr Annie Singh, the chairperson of the Asherville Ratepayers Association, noted that, "the motivation for the increase is (that) it’s essential to enable municipalities to improve their debt collection rate. This will assist them to collect revenue in order to provide effective and more efficient service delivery“.

But, she slammed the price increase as unjustified: "The anticipated increase is not only preposterous but devoid of reasoning taking into account the current state of affairs. Simply put, the increase does not correlate with the services that residents are currently receiving from the municipality. The constant power cuts have become almost a regular feature in most suburbs of eThekwini of which Asherville is no exception."

"The proposed hike is ridiculous given the corruption and maladministration within Eskom. We as ratepayers and taxpayers have to foot the bill. Eskom should not be applying for an increase because so many people have lost their jobs and are barely making ends meet. Our economy is also struggling." said Asad Gaffar, the chairperson of the newly-formed Westville Ratepayers Association.

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Gaffar said in Westville they had street lights that have not worked for about two years.

"We had the issue of cable theft but the municipality did nothing to stop it. Members from our community policing forum got together and patrolled areas to stop the theft."

He said Bonela and Mayville also fell under his association, and residents there were also experiencing constant electricity cuts.

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Shalen Rambaran, a resident from Isipingo, said: "Prior to Covid-19, I ran a successful business as a handyman but when the pandemic started, I did not get enough work to generate an income.

"In December, I managed to get a job but it does not pay as much as I used to earn. If there is an increase in electricity, I honestly don't know what I would do as the cost of living is already high. It is not fair that we must pay more for electricity when there are outages most of the time."

Amar Singh, a resident from Clare Estate, said: "Ratepayers are the milking cows that have now died because of job losses due to Covid and salary cuts. Before implementing a hike, the government must put back all the money they have stolen. That money can be used to fund Eskom, not ratepayers money.

"We are living from hand to mouth. We have to deal with electricity outages every day. Our food gets spoilt and when we complain to the municipality, we are told our complaints are noted and that is the last we hear from them."

Sally Naidoo, a resident from Phoenix, said: "My husband works in the retail industry and earns less than R5 000 a month. This is just enough to cover our utility bills and food. We are lucky we inherited my parent's home, which is paid off. If there is a hike, we will have to choose between putting food on the table or living in darkness."

Kody Chetty, a resident from Asherville, said: "We pay rates but we don't get adequate service delivery. We pay our electricity bills but we still have to deal with outages for up to 48 hours. There should not be any hikes."

Nadia Sheik, a Westville resident, agreed: "These high tariffs are setting us back thousands of rands. Why can't the government do something to provide relief to consumers. The only resolution seems to be increases for ratepayers. I hope our newly formed ratepayers association will help get some answers and better service delivery."

Erwin Rode, an economist, said electricity and other fuels constitute only 3.8% of the basket of items in the CPI (consumer price index) and a sharp price hike’s direct effect on consumers would be mild.

"It would, however, make electricity-intensive manufacturing and farming less competitive on the world stage. In the medium term, a hike of about 20% would indirectly add fuel to the CPI as manufacturers and farmers and municipalities will have to pass on the growing input costs."

He said what the government should have done but for ideological reasons did not, was to have licensed more private-sector renewable-energy generators.

"But while this is now water under the bridge. It is clear that the increase must be substantial to save Eskom."

Msawakhe Mayisela, the spokesperson for the eThekwini Municipality, said: "eThekwini Municipality has been in consultation with Eskom and SALGA (South African Local Government Association) with regards to the MYPD (Multi-Year Price Determination) 5 increases.

“One thing is certain, our customer base simply cannot afford this large increase especially due to the difficult economic climate and the impacts of Covid-19. Eskom has presented their forecast of expenditure for the next three years and from their claims, it appears to be prudent."

He said if Eskom could not recover the cost of producing electricity required by the country, it would have to depend on government grants in order to subsidise electricity.

"The funding of these grants will have to come from taxpayers. The downside to that would be an increase in electricity theft, our revenue would decrease as people would start to use less electricity, some would steal from the grid and this would harbour a negative revenue impact for the municipality."

He said it would also make renewable energy financially attractive, and one would see a distinct migration from fossil-based fuels to renewable energy, which was a positive move for global warming and climate change.

A decision is expected to be made in February.

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