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Public hearing into Eskom's tariff hike begins today

A number of organisations will submit their reasons for either supporting or opposing the price hike.

Democratic Alliance leader, Mmusi Maimane at Eskom briefing. Picture: Reinart Toerien/EWN.

JOHANNESBURG/CAPE TOWN - Public hearings into Eskom's application for a highly opposed 25.3 percent tariff hike are set to kick off this morning.

Eskom's acting CEO, Brian Molefe, is expected to give an opening address, followed by a number of other organisations who will submit their reasons for either supporting or opposing the price hike.

The hike application comes despite ongoing load shedding which government says will be around for at least the next two years.

Molefe is expected to motivate the hike when hearings begin in Johannesburg.

The National Energy Regulator South Africa (Nersa) is expected to make a decision on 29 June.

Last week, Parliament held public hearings on two proposed pieces of legislation, one that authorises a R23 billion special appropriation to the power giant and another which effectively writes off a R60 billion loan that was made to Eskom in 2008.

This follows Finance Minister Nhlanhla Nene's announcement of a complementary package to strengthen Eskom's financial position.

DA STAND FIRMLY AGAINST TARIFF HIKE

Democratic Alliance (DA) leader Mmusi Maimane explained paying more for electricity will result in job losses.

"Not only is inflation potentially going to go up, but industry and business face the risk of not being able to improve their turnover and this has significant implications on job losses. None of us are going to be getting a 25 increase next, so should Eskom be given the same?"

Maimane announced the DA's opposition to Eskom's application for an electricity price increase.

He said Eskom needs a CEO that will be 'frank' with South Africans about load shedding and where the utility is heading and said Molefe has already misled the country.

DA said South Africans cannot be expected to pay more money for electricity while Eskom's top executives earn around R11 million in bonuses every year.

He also said Eskom needs a permanent head whose sole duty is taking the state-owned utility forward.

Despite Molefe's previous experience also heading Transnet earlier this year, Maimane said Eskom needs a permanent CEO.

"We can't have a CEO whose job has not yet been confirmed by the state."

Maimane also emphasised that Molefe has not been honest with South Africans.

"He has been informing South Africans that there will be no load shedding but there is. I'd rather have a leader who is going to be frank with South Africans."

Molefe is expected to stay on in his acting position until the middle of next month unless the board and the public enterprises minister indicate otherwise.

The utility said it needs more money to keep buying diesel, which is imperative to keep the lights on.

The National Energy Regulator of South Africa will make a decision by the end of the month.

ENERGY GROUP OPPOSES ESKOM'S PROPOSED TARIFF HIKE

The Energy Intensive User Group is warning a second double-digit increase for electricity proposed this year would make it difficult for South African businesses to compete internationally.

The industry body says power prices in South Africa have risen 70 percent since 2010.

Eskom raised tariffs by just over 12 percent in April and has applied for an additional 12,7 percent hike for July.

The group, which represents major companies in South Africa including Anglogold Ashanti and BHP Billiton, is opposing the price rises.

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