Youth league says NERSA should reject power utility's request for an almost 20% increase in tariff charges

ANCYL statement on Eskom proposed tariff increase

11 October 2017

The African National Congress Youth League (ANCYL), a home and voice of the youth of South Africa, most of whom are unemployed, marginalised, homeless and economically downtrodden, calls on the National Energy Regulator of South Africa (NERSA) to fervently reject ESKOM’S request of a 19.9% increase in the tariff it charges for electricity. This ridiculous increase proposed by ESKOM will result in those buying electricity from municipalities paying almost 28% more for electricity, after municipalities have included their mark-up.

The proposed increase by ESKOM is worse than attempting to milk a mosquito dry, because it disregards the sad reality that more than 30.4 million South Africans are living in poverty and that almost 32% of household’s disposable income goes to housing, water, electricity, gas and other fuels. This absurd proposal ignores the grim reality that almost 75% of South African household’s net income is used to service creditors and 60% of these South Africans, which will be the hardest hit by this tariff increase, struggle to service their debt consistently.

It is the ANCYL’s view that this proposed increase is not informed by anything else besides voodoo accounting, which is performed to cover up the financial delinquency that has characterised ESKOM in the recent past. The ANCYL is also of the firm view that it is criminal to attempt to pass on the severe costs of gross financial mismanagement and corruption at ESKOM to poor South Africans, while those who are guilty for creating the financial crisis at ESKOM through, fixing prices of coal, issuing tenders irregularly and paying service providers unduly are swimming in a pool of ill-gotten wealth without any disturbance.

The ANCYL rejects this increase and calls on all justice loving South Africans to make submissions to NERSA rejecting it, because electricity is a public good which the state must provide to citizens for free, but unfortunately in South Africa we have witnessed the opposite, with electricity prices having increased by an average of 327% in the period 2006 to 2016. This ridiculous increase will not only kill the already struggling to survive South African households, but it will also have a negative impact on the economy, because it will increase the cost of production.

The only way out for ESKOM from this self-engineered financial crisis is to seek the arrest of all those who have been siphoning money illegally from this public institution, and recoup the money stolen from ESKOM to ease the current financial crisis, as they have already started with Trillian and McKinsey. The tactic of making poor South Africans pay for this theft and financial delinquency will not work, and if pursued against the will of the people, ESKOM and NERSA will meet the full might of young people.

We also call on the government to respond positively to the ANCYL’s call to nationalise mines and other strategic sectors of the economy. If coal mines were nationalised as per the ANCYL’s call, a part of this crisis would have been avoided, because central in many wrong things at ESKOM are deals involving coal, which is one of the cost drivers in the production of electricity. Nationalising mines, including coal mines will not only avoid this graft in coal deals, but will also reduce the cost of producing electricity and ultimately the cost the consumer pays for electricity, because the state which will own the mines on behalf of the people will not be profit driven like the current coal mines.

Issued by Mlondi Mkhize, National Spokesperson, ANCYL, 11 October 2017