"If industry were to foot the bill, then your mining house are likely to cut cost on operations and as such will justify their strategy to lay down workers."
So true, and that's why I'm a communist. And as a communist, instead of shrinking fearfully from this response I suggest the next step is to nationalise those companies that respond by retrenching. The reason business should fit the bill is not just because they use more or pay less, but also because a) they've been profiting since apartheid days, they funded apartheid through big taxes, but now they do not want to fund reconstruction; b) The profits - moved to the UK, consumed, invested in other adventures - were never really theirs to dispose - they were in fact nothing more or less than the surplus produced by the co-operative work of many. C) we didn't cause the current crisis, we didn't ask for Eskom to be commercialised, we didn't ask for fiscal discipline and we are not benefitting from the attempts to restore an irrational system to stability. Electricity is safer than many other forms of power, reduces fires, helps people keep clean and healthy. It's only in capitalism that investment on something as basic as electricity must be weighed against a price increase that will deprive many poor people of access. Had it not been for the mines thirst for profits, the money to spend on the infrastructure of Eskom would have been there before a crisis point. -----Original Message----- From: [email protected] [mailto:[email protected]] On Behalf Of Nndwamato Mutshidza Sent: 22 June 2009 09:34 AM To: [email protected] Subject: [YCLSA Discussion] 34% ELECTRICITY PRICE HIKE... Cdes, Allow me to throw in another angle in this aspects. Th price adjustment like any adjustment we are seeking now may be justified. I am saying if that adjustment seeks to focus on operational cost of ensuring that there is still light every night. The issue here is that it might not be the 34% required but ability to adjust to inflation level as the cost of primary energy (Coal, Liquid Fuel, Gas, etc.) has gone up in line with international commodity prices. Having said that I think, If Eskom asked for adjustment to cover Inflation adjustment, some of us will be able to support that view. We are aware that the prices of Liquid fuel went down last year and then start climbing this year. While the price of coal went up and the amount used to reconstruct our roads in Mpumalanga and to remove those potholes. The discussion that seeks to say only big Business should pay for the adjustment is uninformed. Currently, Industrial customers pay more than we see depending on how far they are located from the Source, which then together with other tariff components become levelised through a cross-subsidy to allow the poor to pay less. If industry were to foot the bill, then your mining house are likely to cut cost on operations and as such will justify their strategy to lay down workers. We do not need to give these industry room to retrench and as such we should look at what fair for all. Which in my own view is the cross subsidy route. Then if industry cannot bear the brunt who must do that? Is it us or the entire tax payers,even those that do not have electricity? I think all of us will say no, if the intention is to cover for operational cost. If we are to fallow true business principles, the failure by the Executive to Capitalise on Opex should results in someone fired. But because Eskom is SOE, mediocracy is acceptable. I think without any justification, Eskom should see to it how it adjust but within the acceptable levels. When Eskom did its ISEP plan it also look at the long term price path of these primary energy carriers and budget accordingly. If Government approved that plan, it means the short falls should be the responsibility of the Board and Executive. It cannot be the responsibility of the Shareholder (Government) fund in efficiency so that it can be passed to Citizen through Tax. The 2nd angle, is this approach adopted by Treasury, which advice Municipalities to adjust their price by 34% Nominal (25% Real) based on speculations that are uninformed and such seeks inform the path of Eskom price hikes. To me, when looking at this is that because you have ensure that Municipalities budget on these assumption and could not just willy-nilly adjust budget, makes it impossible for Governmet not to support Eskom price hikes. hence when we critique this issue lets look at the process wholly. I think that the fact that Eskom submitted its adjustment late makes it very unfair on our part and could only be adjusted next year or else a lot of litigations will follow us in this path. As workers and poor we should not only wait for Soweto Electricity Crisis to take a lead, but the YCL and SACP should have also went and made input and refuse these adjustment request. If we are not able to provide leadership in Community, other forces will take a lead. Lets be proactive and set committee to look at things like these in future to formulate a position. There is Multi-Year Price Determination (MYPD) on the way, we should start now to engage with Mining houses, Industry and Eskom to get an understanding as we prepare ourselves for future adjustments.We should ask who should bear the price for expansion, Strategy will inform us as to where this SOE will seek funding, through Bonds, Equity shares and other third stream financing mechanism, which we all need to study to inform Eskom path going forward. All these if are at our disposal will make it easier for us to lobby. I remain, -- This message is subject to the CSIR's copyright terms and conditions, e-mail legal notice, and implemented Open Document Format (ODF) standard. The full disclaimer details can be found at http://www.csir.co.za/disclaimer.html. This message has been scanned for viruses and dangerous content by MailScanner, and is believed to be clean. 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