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No tariff hike, more power cuts
15/04/2008 18:13 - (SA)
Johannesburg - State electricity utility Eskom could be forced to implement more blackouts if it does not get permission to increase tariffs by 53%, Finance Director Bongani Nqwababa said on Tuesday.
Eskom has said electricity prices need to double in the next two years if it is to deal with a crippling power crisis that forced key mines to halt operations for five days in January.
"In the event the (national electricity regulator) don't award the increase...we might have to be in a situation where we cannot use more diesel because we simply cannot afford it," Nqwababa told a conference call.
"And, as a result we might have to load shed and the cost of that on the economy might be much bigger."
Nqwababa said Eskom's capital expenditure programme would add more than R125bn to the country's gross domestic product and directly add 0.8% to inflation. The indirect impact was seen at 0.6%.
Eskom would prefer to go to the debt market after a June 6 tariff decision on its request to hike tariffs, which Nqwababa said should remove a cloud over the utility's credit rating.
Nqwababa said Eskom - which has a total net generating capacity of 37 761 MW from 11 operating coal-fired power stations - had contracted 39 million tonnes of coal for the next two years.
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