050910 Electricity pylons carry power from Cape Town's Koeberg nuclear power plant July 17, 2009. South Africa will need 20 gigawatts (GW) of new power generation capacity by 2020 and would require double that amount a decade later to meet rising demand, the country's power utility said September 7, 2009. Picture taken July 17, 2009. REUTERS/Mike Hutchings (SOUTH AFRICA ENERGY BUSINESS)

Johannesburg - A former Eskom executive director on Wednesday shot down the energy provider's proposal for an annual 16 percent electricity price hike for the next five years.

Mike Deats said Eskom had failed to address some important issues in its Multi-year Price Determination (MYPD) 3 report, which could see the price of electricity go up until 2018.

“What happens after 2018?” he asked at a National Energy Regulator of SA hearing in Midrand.

Deats highlighted a project proposed by Eskom which would see it needing to transport coal from the Waterberg coalfield.

“Coal trucks are damaging the roads, but they have failed to start on plans to build the railway lines.”

He said Eskom was still a long way from completing some of its projects, because it was waiting for funding, instead of creating a system whereby the project would pay for itself.

SA Chamber of Commerce and Industry CEO Neren Rau said the chamber had conducted a survey to see how businesses felt about the proposed hike. He said most understood a price increase was necessary.

“Sixty-six percent of businesses indicated that they would be willing to accept a five to 10 percent inflation rate.”

However many said they would need to scale down their businesses and reduce their staff complement to stay afloat during the five to 10 percent hike.

By mid-afternoon only 15 of the scheduled 35 speakers had completed their presentations.

Representatives from the steel and engineering industries, Earthlife Africa and the chamber of commerce were among those who had already addressed the panel.

Hearing chairman Thembani Bakula said presentations would continue until 5.30pm. The hearing was scheduled to continue on Thursday, and could be extended to Friday.

A protest being staged outside had died down by the afternoon. Several of the protesters, wearing red hats and caps, had entered the auditorium and were waiting for their leaders to address the panel. Others sat in minibus taxis and sang struggle songs.

Earlier, around 100 people carrying placards had blocked the gate to the premises.

Some of the placards read: “Eskom's application equals job losses and inflation” and “Link electricity tariff increases to inflation”.

Two men wrapped in plastic, with electric cables around their necks, sprawled on the ground. Above their heads were cardboard tombstones with the words: “RIP Eskom, you are killing us”.

Several elderly people were among the protesters. One of the protesters shouted that Eskom was denying them their basic right to electricity.

Besides the proposed electricity hike, the group said they were against nuclear energy. According to one placard this was a “Nuclear Fukushima”.

Eskom had applied to Nersa for an electricity price increase of 16 percent every year for the next five years. This would more than double the price of electricity over five years, taking it from 61 cents a kilowatt hour in 2012/13, to 128 cents a kWh in 2017/18.

Earlier, Eskom's finance director Paul O'Flaherty told the hearing it needed the increase to maintain revenue and cover operating costs, among other things.

He said if Eskom merely minimised operating costs, as had been suggested, the servicing of machinery would be neglected and there would have to be massive staff reductions. - Sapa