Big business and metro reconnect

THE decision by the Nelson Mandela Bay council to write off millions of rands in electricity fees owed by some of the metro’s biggest employers has finally been made.

That it follows many months of intense negotiations underscores the fact that it cannot have been an easy step for city fathers to take.

The decision is, after all, one that will make a sizeable dent in municipal coffers – and it is no secret our municipality is concerned about its ever-dwindling revenue.

Of course there is now also the distinct possibility that smaller business, too, will expect concessions.

But ultimately it is the kind of move that was inevitable if jobs are to be safeguarded and a re-invigoration of the languishing Bay economy is to be achieved. Our high unemployment rate is already a worry and we cannot afford to lose more jobs.

Big businesses – most of them from the automotive and related industries that form the bedrock of the Bay economy – have been complaining for years that the high cost of electricity is making them less competi- tive and threatening future investment. Some have been forced to lay off staff and cut production as a result; others have shut down.

Thirteen high-energy users, joined by the business chamber, took the municipality, the Department of Energy and the National Energy Regulator to court, saying they simply could not afford electricity prices 35% higher than if they got their power straight from Eskom.

Electricity prices in the metro have tripled since 2009, squeezing industry and reducing economic growth.

The businesses even turned to Jacob Zuma for help, hence the president’s instruction to the municipality in April last year to negotiate out of court.

Formal negotiations began in September and, though details of Thursday’s behindclosed-doors settlement remain sketchy, the fact that the parties could eventually reach consensus for the greater good is encouraging.

We can only hope that the shaky relationship between big business and the municipality will now begin to be healed. Going forward, cooperation between the two is vital if this city is to grow and prosper.