Lulu Xingwana, Minister of Agriculture and Land Affairs, South Africa (left) and Buyelwa Sonjica, Minister of Minerals and Energy, South Africa (right) underscore the importance of women’s participation in issues related to energy and land affairs.
Originally uploaded by Pan-African News Wire File Photos
Power prices must double – Eskom
Wed, 09 Apr 2008
There is an urgent need to double electricity prices over the next two years, Eskom told the National Electricity Regulator of SA (Nersa) in its recent application for a tariff hike.
"Thereafter, once they are at acceptable economic levels, prices can escalate marginally just above inflation rate," the power utility said its submission released on Tuesday.
R60bn govt loan
"The financial analysis already assumes a R60-billion government loan and aims to maintain Eskom's credit rating to enable the company to fund the build programme."
Nersa made an edited version of Eskom's application available on its website. Earlier, it said sections of the submissions would be withheld to protect the company's position in co-sales deals.
In its application Eskom asked for a revision of the 2008/9 electricity prices from 14.2 percent to a 53 percent real increase or a 60 nominal increase.
"If the status quo remains, the price increase for 2009/10 will be almost 100 percent," Eskom said.
It said it fully recognised the proposed tariff hikes could have a negative impact on customers with "undesirable social impacts".
Eskom said it incurred higher primary energy costs in 2006/7 and 2007/8.
Projections for 2008/9 would result in the utility barely breaking even in the current financial year, and it could incur significant loss in the next one.
Protecting the poor
Eskom said there were a number of options to soften the impact of sharp price increases on the poor.
"A simple and easy way is to implement a method applying a lower price increase to tariffs that should receive protection while increasing the other tariffs."
Earlier, Eskom spokesperson Andrew Etzinger said the application to withhold sections was to protect the company's position in "hard-core" coal sales deals.
Etzinger said that without this stance, the company might have to pay more for coal, pushing the price of electricity up even more.
The company is currently in negotiations with mining houses to buy about R45-million worth of coal, currently at a spot price of around $100 a ton, compared with around R100 a ton about two years ago, said Etzinger.
"Unfortunately this means that discussions are hard core. We are not talking about one or two percent here or there, so we have to make sure our negotiating position is as strong as possible."
The application document contained details of deals already concluded, he said.
"It is a sound commercial decision not to disclose the information about the concluded contracts that are captured in our application. It would compromise Eskom's position at the negotiating table," said Etzinger.
This also applied to information on its energy saving campaign.
The company has put several energy saving initiatives out to tender as part of its bid to avoid current power shortages that have led to scheduled electricity blackouts.
"We don't want to reveal the negotiating targets because we will find it difficult to manoeuvre... the dynamics are quite serious." Sapa
Mass action against rising costs
Wed, 09 Apr 2008
The Congress of South African Trade Unions (Cosatu) plans to embark on rolling mass action against rising food, electricity and transport costs, and interest rates, the SABC reported on Wednesday.
This comes after the Competition Commission announced the formation of a crack team to investigate price fixing in the food industry.
Cosatu secretary-general Zwelinzima Vavi said the labour federation would mobilise the public, to show its "anger in the streets".
He said from next week, a series of marches, demonstrations and stay-aways would begin.
"We have made a call for every organisation in South Africa to join us, so we can build the biggest coalition of organisations opposed to the current hikes, particularly in the food prices.
"This would put pressure on food manufacturers, retail companies and farmers, so that they stop profiting on the expense of the poor and ordinary South Africans."
Cosatu said its protest action would be directed at Business Unity South Africa and its relative affiliates, farmers organisations, and government departments such as agriculture, land affairs, trade and industry, treasury and social development. Sapa