The time for soft talking on electricity price hikes is over

WHILE collaboration between political and economic stakeholders is key to a strong growth rate and moving the country forward, the business sector must also be able to recognise when the economy is in need of a healthy dose of honesty.

As businesses in Nelson Mandela Bay are faced with the dire consequences of South Africa’s junk status and recessionary period, it is true much of this could have been avoided had it not been for the volatile political landscape and related weaknesses of state-owned enterprises dragging our country’s economic growth and international investor confidence down.

It is from within this economic low point that we find ourselves needing to take action – as civil society, business and all concerned citizens – to ensure that South Africa’s economy is reprioritised, without any personal or political agendas.

While legal action has in previous years mostly been unheard of – particularly for business organisations where all avenues of discussion and mediation are usually exhausted before any legal steps are considered – the current situation at one of arguably the worst-run state-owned enterprises in the country calls for less talk and more action.

Last year, the country sat up and took notice of the business fraternity in Nelson Mandela Bay when we, together with the High Energy Users Group, challenged unreasonable electricity tariff increases, and subsequently won our case in August in the high court.

The effective outcome of the judgment resulted in a nominal electricity increase – for all electricity users in South Africa – this month.

The average increase of 1.88% is the lowest increase in tariffs on record.

If the high court judgment had gone against us, we would have expected increases well above 10%.

While the judgment in favour of the Business Chamber and high energy users in Nelson Mandela Bay has recently been reversed by the Supreme Court, this decision needs to be challenged in the interest of businesses’ sustainability.

It is unacceptable that we may see electricity price increases of up to 28% next year.

This is unsustainable and will create even more hardship for hard-pressed consumers and the business sector struggling to survive in the recessionary environment.

High electricity increases affect all of us in both our private and business lives. As an example, if your monthly electricity bill at home or at your business is R10 000, a 28% electricity tariff increase, which is what would be likely for next year, would be a staggering R2 800.

This situation will be disastrous for the country, and particularly for Bay businesses that depend on competitive electricity pricing.

It could threaten the existence of many businesses and add significantly to the already high unemployment numbers.

As such, it is important to once again stand up and act to prevent this vicious circle of increased prices and decline.

The High Energy Users Group must be backed in taking this to the Constitutional Court. Are you with us?