Speaker, access to affordable energy services is a prerequisite for sustainable development and economic creation.
The cost of the replacement of assets in determining electricity prices needs to be clarified by Eskom, taking into consideration the proposed multibillion-rand nuclear project and the expansion project of coal fired generation currently. Citizens of our country, especially the poor, as well as job-creating businesses simply cannot absorb the year-on-year electricity tariff increases that have become the norm and are expected to continue.
The use of the modern equivalent asset valuation method, which radically inflates Eskom expenses, is not justified. Capital expenditure for expansion should be financed out of equity from loans, on the basis that such expenditure is intended to produce increased future income.
The DA believes the solution lies in the easing of the country into the competitive electricity market and that South African citizens should be well informed of future pricing arrangements. We believe the issue of electricity prices should form part of the bigger fiscal debate.