Since the ANC and its allies "unanimously" rejected Eskom's planned increase in electricity tariffs Public Enterprises Minister Alec Erwin has backtracked on his support for the power utility's intentions.
Erwin said on Wednesday that while his department had supported Eskom's bid to raise the cost of power he called for the "most effective and quickest way" of finding an alternative way to deal with the crisis.
"When we started discussing this matter with the ANC and other parties it became evident that a big-spike increase, once-off over one or two years, was not favoured," he said.
This is an indication that Luthuli House, under pressure from its leftist allies, was subtly influencing and micro-managing the government's decision-making process.
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Erwin said the energy summit, starting on Friday, would discuss alternative solutions.
"What we are looking for is a sensible decision that we can all buy (into). Nobody is going to be happy with tariff increases no matter what they are, but there is a sensibility and reasonableness in the discussion that realises there has got to be some increase," he said.
He said the legal process of Eskom's application to the National Energy Regulator of SA, which is expected to deliver its ruling in June, had to be complied with.
Erwin met Rio Tinto chief executive officer Tom Albenese on Tuesday afternoon to discuss the diversified mining group's contract.
The government had offered the company preferential electricity tariffs.
The meeting follows this weekend's call by the tripartite alliance for a review of energy-intensive operations such as Rio Tinto's aluminium smelter.
The partners said such a review should determine whether their demand for electricity had any economic benefit for the country.
Erwin said they had established a team to evaluate whether Rio Tinto and the government had met their contractual obligations.
"If they haven't, what proposals should be made? Do we adjust the contract, delay it or cancel it?" Erwin said.
He said he was not surprised that industries were now questioning whether their development plans could take place under the current situation.
"That is the question that is being asked, and it's a sensible one," he said.
Erwin also accused South Africans of "economic xenophobia" after he was asked why Eskom's foreign customers were treated differently from locals in terms of power cuts.
"I still can't comprehend this logic that we must punish foreign customers and that we are somehow criminal in exporting to them."
- This article was originally published on page 3 of Pretoria News on May 15, 2008
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