Tariff hike ‘will kill’ downtown businesses

2013-11-12 00:00

MSUNDUZI Municipality has rung the death knell for small businesses in downtown Pietermaritzburg with its 1 200% electricity tariff hike.

So said a group of small business owners who fear that their next electricity account could spell their doom.

The group plan to write to Finance Minister Pravin Gordhan asking for his intervention in the Msunduzi tariff debacle. The National Treasury plays a watchdog role over the local municipality’s financial affairs.

They are also considering holding a protest march to the city hall.

Spokesperson for the group, former city councillor Osman Ganie, said small businesses were already struggling to survive in the current economic climate and many had closed down in the past year. He said the massive and unexpected electricity tariff increase would mean many more closures.

Ganie said that as a landlord he was struggling to rent out shops and office space. Most of the big banks have left the downtown area because there is no business here. “I am now renting out shops that are being used as warehouses for storage by the bigger companies,” he said.

Many business owners spoke out at the group meeting, but refused to be quoted in The Witness, fearing victimisation by the municipality. They asked Ganie to be their spokesperson. The former councillor said that trust between local small business and the municipality had broken down. Ganie said when Msunduzi went under administration it was the small businesses that were targeted and accused of stealing electricity.

“The bigger businesses had money to go to court and many won their cases. The smaller businesses sitting with faulty meters had to cough up as they had no money to go to court.” Ganie said they were angry because they are being targeted again by being the sector facing the highest tariff increases. He said they were also the sector that employed the unskilled. “Each small business employs at least up to four people,” Ganie said.

Pietermaritzburg Chamber of Business (PCB) CEO Melanie Veness said the increases were unacceptable and that the PCB was definitely taking up the issue with the National Energy Regulator of South Africa (Nersa).

The city council last week decided to increase the commercial 80 ampere basic charge from R49,22 to R661,35 and commercial three phase (100 amps) from R81,14 to R861,80.

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