Eskom tariff hike rejection welcomed

Eskom claimed it needed the money to buy diesel and to help stop load shedding.

FILE: Eskom had claimed it needed the money to buy diesel and to help stop load shedding. Picture: Gia Nicolaides/EWN.

JOHANNESBURG - Both organised business and organised labour have welcomed the National Energy Regulator of South Africa's (Nersa) decision to refuse Eskom's application for a special price hike.

Nersa says it has decided not to grant a new increase of 9.5 percent on top of the hike it had already approved.

South African Chamber of Commerce and Industry's (Sacci) acting CEO Peggy Drodskie says this increase would have really hurt business.

"If we did have that it would be more costs in doing business and the possibility that members of Sacci would have to start retrenching staff."

While Congress of South African Trade Unions' Gauteng provincial secretary Dumisani Dakile says giving Eskom more money simply doesn't help.

"You can give them a 100 percent increase but we don't believe that they would be able to resolve the problems of load shedding, which indicates to us that problems and challenges in Eskom are structural and not necessarily resources."

WATCH: Nersa dismisses Eskom's application for hefty tariff increase

But Eskom had claimed it needed the money to buy diesel and to help stop load shedding.

Meanwhile, the Chamber of Mines says it's also pleased that Nersa has rejected Eskom's special application for another power price hike because charging consumers more will not fix its problems.

Nersa has explained it will not grant the power utility its hike saying it hasn't properly explained how the increase will work at this point in the municipal financial year.

The chamber' economics head Monique Mathys says another strategy is needed.

At the same time farming organisation Agri Wes Cape says Eskom's proposed hike would have crippled the sector.

The organisation's Carl Opperman said, "It would have just brought our production cost higher and at the end we are delighted that Nersa has taken this step to delay it or say no at this time."

Unions are also relieved.

The Independent Municipal and Allied Trade Union's Anja Muller-Deibicht says Eskom's not running its operations efficiently enough.

"We believe Nersa has seen the failings that Eskom has at leadership, management and implementation level and they could not allow an increase with the status quo being maintained."

WATCH: Eskom disappointed by Nersa dismissal