The Nelson Mandela Bay Business Chamber participated in NERSA’s hearing today on Eskom’s 6 th multi-year price determination which reviews electricity increases for the 2025/26 and 2027/28 financial years. The proposal is for electricity tariffs to increase in the 2025/26 financial year by 43.55% for municipalities, and follows two decades of much higher than inflation related increases in electricity tariffs, says Chamber chief executive, Denise van Huyssteen.
The requested increases are the result of a range of well documented issues including delays in the commissioning of new power stations.
The Chamber is opposing this increase which is looking for around R300 billion income through the imposition of electricity tariffs at an above inflation rate for the next three years. Transferring these costs to businesses and consumers is simply unsustainable.
One of South Africa’s competitive advantages used to be having among the cheapest electricity rates in the world, and now we have a situation where by 2026, medium sized industry in municipalities will be subjected to less competitive tariffs versus other emerging markets.
Municipal inefficiencies and particularly non-payment to Eskom, is a further burden, which is being shifted to the electricity users. The application includes unresolved municipal debt of R187 Billion, to be funded by Eskom through the tariffs.
Added to this the electricity distribution in many municipalities, including in this metro, is financially unsustainable. In fact the Nelson Mandela Bay Municipality is budgeted to make a R1.3 billion loss in electricity, which previously was a profitable function. Key issues which need to be addressed include illegal electricity connections and meter tampering.
Equally worrying is the lack of investment in routine maintenance and upgrading of the electricity infrastructure. This poses a serious risk to the sustainability of businesses and especially those in the manufacturing sector. Within the industrial and commercial areas of the metro, we have tracked 66 major power dips this year and 114 unplanned power outages since January 2023. These power outages pose massive risks to our economy among which include production volume targets not being met, loss of export orders, costly damage to equipment and machinery, the elimination of shifts and placement of workers on short time, retrenchments and even relocation of manufacturing plants to other countries or their permanent closure.
One of the fundamental requirements of operating a business is having access to cost effective and reliable electricity power. The Chamber regards this as a high priority and is willing to collaborate with the relevant stakeholders to find and implement sustainable solutions. Specific initiatives which we are currently driving include Adopt A Sub-Station and the Electricity Technical Task Team which incorporates the participation of the Municipality, Eskom and Chamber members and is focused on addressing critical municipal electricity infrastructure issues.
Find Business Accommodation in Gqeberha HERE
Gqeberha (Port Elizabeth) is a beautiful city located on the coast in the Eastern Cape Province and is known as the “Friendly City”, with other towns in this district including Kariega (Uitenage) and Despatch. Forming part of the Nelson Mandela Bay Metro, Gqeberha has stunning beaches, historical museums and memorials, award-winning wildlife sanctuaries and super friendly people, making it a spectacular holiday destination.
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Tax revenue: Tax Revenue has increased from R100 billion in 1994 to R1,4 trillion in 2016 in South Africa. Not only does this indicate the efficiency of tax collection, but also a broadening tax base in South Africa. Essentially this means that an accessible target market for start-ups has increased and should continue to increase.