Cosatu says if Nersa approved these hikes, the mining industry is likely to move off the grid and set up electricity plants at the mines. File Photo: IOL

CAPE TOWN – Eskom’s proposal of a tariff increase over the next three years has been met with harsh criticism, with the Confederation of South African Trade Unions (Cosatu), warning the state-owned entity that this could very well be the death knell for Eskom.

Cosatu said in a statement on Tuesday that if the National Energy Regulator of South Africa (Nersa) approved these hikes, the mining industry was likely to move off the grid and set up electricity plants at the mines. 

The confederation lamented that the power utility had for the past decade been selling the nation a story that above-inflation hikes would save it but nothing had changed and the utility was still a burden on the taxpayers. 

“We have seen no solid and coherent plan to turn the utility around, or manage the escalating debt levels and eradicate corruption. We are yet to see a forensic audit of its legendarily corrupt contracts,” it said.

Uasa also slammed Eskom, describing the proposal as a slap in the face of the already over-burdened South African workers.

Uasa is 100 percent opposed to the proposed tariff hikes, it said in a statement on Tuesday. “Workers are stretched to the limit and can barely make it through the month on their take-home pay. How does Eskom imagine milking and holding South Africans to ransom for its poor leadership and corruption will improve anything?”

Uasa spokesperson Stanford Mazhindu said should Nersa grant the proposed tariff hike, it would see South Africans paying 102c per KW from the current 89c per KW.

Time to face the truth

“South Africa’s workers cannot and should not suffer due to Eskom’s poor decision-making over the years. Instead, it is time to face the truth – the issues at Eskom cannot be solved by money alone, but a deep inspection of the entire company and staff is also desperately needed. 

“The corruption that brought the company to its knees during the Zuma days needs to be undone, and those that were involved should be removed from the payroll, said Mazhindu.

He said companies and employers would struggle to keep up with these rising costs in an already challenging business environment, which in turn would create an environment of possible job losses. 

“With unemployment currently sitting at 27.5 percent, it is time to plan and find solutions to the problem; we cannot afford to lose more ground because of the shenanigans of state-owned companies,” said Mazhindu.

Eskom chief executive Phakamai Hadebe said the company would reach a debt of R600 billion should it fail to implement its proposals.

Uasa contended that instead of proclaiming “every South African’s responsibility in helping the struggling utility company” by paying more, Hadebe should consider saving money by being transparent about contracts signed during the Zuma days. 

Cosatu said what it found even more upsetting was that this money would to be used to cover the massive R419 billion debt incurred by Eskom through years of corrupt and incompetent mismanagement. “It seems like Eskom is oblivious to the simple fact that South African consumers, industry, and municipalities can no longer afford its continuous above inflation runaway tariff hikes.”

BUSINESS REPORT ONLINE