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Thousands of jobs on the line
27/05/2008 11:30 - (SA)
Johannesburg - Eskom's proposed 53% tariff increase will have a big negative effect on the economy, Business Unity SA said on Tuesday.
Speaking at the second day of public hearings of the National Energy Regulator of SA (Nersa), Busa's Roger Baxter said studies had shown that the economic impact of the hike would reduce the country's gross domestic product and would lead to about 55 000 job losses.
"...It will have the biggest negative (effect) on the economy," Baxter said.
"Pricing is not the only solution; effective leadership and strategic appropriation of management is important," he added
Busa said that time was needed for business and consumers to get used to the increases.
"It is a process, not a once off event. It will take long for people to adjust."
It suggested that price increases should be eased in.
The Congress of SA Trade Unions (Cosatu) also rejected Eskom's proposal, saying it would have far reaching consequences.
"The proposed increase is not economically viable, it will have devastating effects not only on the poor but also on the economy," said Cosatu's deputy general secretary, Bheki Ntshalintshali.
Meanwhile, the Anti Privatisation Forum said that the increase would impact negativity on the poor
"It would negatively affect the living standards of people ... especially the poor," said the forum's Silumko Radebe.
The forum called for government's allowance of 51 kilowatts of electricity to be increased to 100 kilowatts per month.
Cosatu said the cost of additional free electricity should be borne by the country's national budget.
Sapa
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