Saftu: Eskom tariff hikes the main contributor towards the ever-rising cost of living

Saftu general secretary Zwelinzima Vavi speaks during the congress in Ekurhuleni. Picture: Itumeleng English/African News Agency (ANA)

Saftu general secretary Zwelinzima Vavi speaks during the congress in Ekurhuleni. Picture: Itumeleng English/African News Agency (ANA)

Published Jan 13, 2023


Johannesburg – Eskom tariff hikes are the main contributor to the ever-rising cost of living and Saftu is firmly opposed to the travesty, says Zwelinzima Vavi, general secretary of the South African Federation of Trade Unions (Saftu).

He urged the government to make changes.

In September 2022, when the National Energy Regulator of SA (Nersa) was conducting public hearings regarding Eskom’s proposed 32% tariff increase, Saftu firmly opposed the idea. It continues to maintain that stance in the light of the 18.65% hike that was subsequently approved.

Vavi said: “We still oppose the approval of a vast 18,65% tariff hike, as it will devastate the budgets of poor and working people, especially women. Eskom’s strategy is still aimed at privatising power generation without genuine decarbonisation.

“And Eskom has been so badly managed and regulated, that giving it more money without full transformation is a recipe for failure. Eskom has blown more than R700 billion on capital expenditure since 2007, but produces 25% less electricity today than then.

“The money has gone mainly to pay for the corrupt, skorokoro Medupi and Kusile coal-fired power plants, for which Eskom owes most of the R400 billion in its liabilities, to lenders (like the World Bank and Western governments’ import-export banks) which should be cancelling it on the grounds that it is ‘odious debt’.”

Saftu also shared their frustration of electricity becoming unaffordable for the poor and working class in the country. This latest tariff increase, combined with increases in the past 15 years, have made the electricity tariff more than 800% higher than it was in 2007.

“These tariff hikes are the main contributor to the ever-rising cost of living. In 2022, the average food expenses for a household of four grew by more than R400 to an estimated total of R4 853.

“This, while the cost of electricity consumption of 350 kWh increased by R50 to a total of R787.50, according to the Household Affordability Index.

“In addition to electricity and food, fuel has increased dramatically in the past year. Petrol prices (93 unleaded) are still 40% above what they were on the eve of Covid-19 pandemic in March 2020.

“The fuel price increases have pushed up the prices of commuter transport such as buses and taxis, as well as of home cooking and heating expenses,” added Vavi.

Saftu has long registered its opposition to the political economy of neoliberalism which, among others, include plans for the privatisation of Eskom.

Vavi said: “The union continues to reiterate this position to defend and save public ownership of energy provision and avoid ever increasing electricity tariffs.

“If it were transformed, only Eskom can nationalise the national grid so that supply of desperately-needed solar and wind energy does not follow the profit motive, but the public and environmental interest.”

Saftu is calling on government to ensure that:

• Andre de Ruyter leaves his position as soon as possible;

• The Eskom board hires a competent management which has the public interest, not vested interests, at heart, so as to ensure proper maintenance and an end to load shedding;

• Eskom rapidly introduces renewable energy, not through the chaotic IPP, but through public ownership, and at a much more rapid rate given the need to decarbonise as rapidly as possible;

• Stop Eskom’s unbundling, and take over all projects being developed by IPPs;

• Repudiate the odious debt incurred during the building of Medupi and Kusile (given Hitachi’s admitted violations of the US Foreign Corrupt Practices Act when giving 25% of its local subsidiary to ANC-linked Chancellor House, which all lenders knew about); and,

• Fund Eskom to ensure that all cost-overruns and debt servicing costs aren’t passed onto consumers, especially those from the poor and working classes already reeling from load reduction and the demise of Eskom’s cross-subsidies occurring under De Ruyter’s reign.

“The crisis of Eskom and energy provision is part of a host of crises that have gripped the country, with corruption and austerity, record unemployment and poverty.

“Resulting from the sum of these problems, violence in communities and corruption induced assassinations, such as the attempt on Professor Sakhela Buhlungu’s life, have increased, and are indicative of the failed neocolonial capitalist state we are on the brink of,” said Vavi.