SAMWU Urges NERSA to Reject Eskom Tariff Hike Request

12 October 2017

The South African Municipal Workers’ Union (SAMWU) notes with concern the recent electricity tariff hike request by the country’s power utility Eskom. The power utility has applied for a 19.9% tariff hike for its direct customers and a 25% hike for customers who receive their electricity from municipalities. 

The reality is that South Africans are already forced to stretch their Rands as far as they can. As a result, the requested tariff hike would not be affordable to ordinary citizens particularly given the country’s high levels of unemployment and poverty. This increase will further result in consequential increases of food and transport. The working class are forced to use large percentages of the peanuts they get in exchange of their labour for transport, food and electricity.

“We are concerned that majority of our members, who are by the way the least paid government employees are going to be gravely affected should this absurd request be granted by the National Energy Regulator of South Africa (NERSA)” said SAMWU General Secretary Simon Mathe. “Currently there are municipalities which are struggling to pay municipal workers their salaries as a result of the debt restructuring which has been made to service debt with Eskom. Municipalities have opted to prioritize Eskom while municipal workers are left to linger in hunger and starvation” added Mathe.

As NERSA prepares for public comments on the request by Eskom, SAMWU will be writing to the regulator urging it to reject this request as it would simply be unaffordable the majority of South Africans. If granted, the increase will not only add on municipal debt levels but will marginalize the poor and the working class, denying them of access to electricity which is a basic right. 

We believe that Eskom has not substantiated its request for this increase apart from arguing that it needs the extra money to keep operations going. If this is the issue, we urge Eskom to approach Trillian and Mckensy to recoup funds which were fraudulently channelled to these companies. Eskom cannot seek relief from poor South Africans for its mismanagement of funds. 

Our opposition of this hike request is further influenced by the fact that the current financial situation that municipalities find themselves in would be exploited further by the increase. “We urge all stakeholders, in particular the South African Local Government Association (SALGA), COGTA and National Treasury to urgently hold a meeting with the aim of ensuring that municipalities receive a fairer equitable share. The country’s municipalities are expected to deliver services to almost 60 million South Africans with less than 10% of government expenditure” said SAMWU Deputy General Secretary Moses Miya.

Municipalities are in the coalface of service delivery and as such they should be prioritized when Treasury does its budgeting, this in the interest of service delivery. “We are of the view that a fairer equitable share will allow municipalities to deliver quality services. Until such time that municipalities are sufficiently funded, the delivery of basic services to South Africans will always be compromised. We in fact believe that these debts should be written off so that municipalities can focus on service delivery. After all, municipalities do not exist for profit making but their constitutional mandate of the delivery of services” added Miya. 

Issued by Papikie Mohale, National Media Officer, SAMWU, 12 October 2017