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‘Eskom hike will close factories’

Economy

Johannesburg - A 16 percent increase in the electricity tariffs would result in many factories shutting down, the National Electricity Regulator of SA (Nersa) heard on Thursday.

The SA Clothing and Textile Workers Union (Sactwu) said this emerged from a survey of 93 different companies employing about 20,400 workers in the clothing, textile, leather and footwear sectors.

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090914. Cape Town. The Southern African Clothing & Textile Workers' Union (SACTWU) confirms that the clothing industry wage strike will start tomorrow morning, 15 September 2009. The union has received an overwhelming mandate to embark on strike action in pursuit of its members' wage demands. Of the 46 600 clothing members of the union who voted in a secret ballot over the last three weeks, 92% have voted in favour of strike action. Clothing employers are currently offering a weekly wage increase of between R19 and R32 per week.Clothing workers are the lowest paid employees in the whole of the South Africa Manufacturing sector. Picture Henk Kruger

“Fifty-five percent of them said they would shut down and 67

percent said they would have to conduct downsizes and retrenchments,” Sactwu official Simon Eppel told the hearing in Midrand.

He said this meant about 14,000 people would lose their jobs.

Many companies were already retrenching workers and others were cutting down on workers' hours in order to try to save money ahead of the increase, said Eppel.

He recommended that Eskom propose an inflation-linked increase or a below-inflation increase.

The Nersa panel, chaired by Thembani Bukula, is gathering views on Eskom's request for a 16 percent increase in electricity prices each year for the next five years (known as MYPD3).

The proposal will more than double the price of electricity in five years, taking it from 61 cents a kilowatt hour in 2012/13, to 128 cents a kWh in 2017/18.

Melita Steel from Greenpeace Africa rejected Eskom's call to extend the MYPD3 over a five-year period.

“We propose a tariff application that would run for a maximum of two years.”

She said there were no guarantees that the five-year MYPD3 plan by Eskom would have any success.

Steel said besides the tariff hike increase, Greenpeace was also against Eskom's proposed nuclear plans.

“If all South Africans are to finance Eskom's capacity expansion programme, then Eskom should be investing in substantial renewable sources.”

She said the nuclear programme was an environmentally irresponsible programme that would be even more expensive to run than the current method of coal. - Sapa

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