The IFP has noted with some concern comments attributed to the Minister for Public Enterprises to the effect that electricity prices should be increased by about 18% to fund Eskom's capital expenditure programme that would secure more supply in the future.
The IFP has two major concerns with the Minister's statement. First, it appears that he has forgotten that the National Energy Regulator is an independent regulator, created by law with the mandate, amongst others, of setting annual electricity tariff increases for Eskom. Is the Minister therefore proposing to interfere in the independence of the regulator?
Secondly, the IFP is opposed to electricity consumers funding Eskom's massive expansion plans by way of tariffs that are increased by such large amounts as proposed. Ideally, annual increases should remain within the government's inflation target range. Eskom is a very large company with a healthy balance sheet, and it should therefore have no problems with raising the necessary funding on the foreign and domestic capital markets, especially not if government were to issue the required guarantees to lenders. Any shortfalls in funding requirements would have to be met from public funds, as government is Eskom's sole shareholder. The consumer cannot be expected to fund a parastatal's expansion plans, even if they are in the national interest. Thank you.