THE "catastrophic reality" of high municipal mark-ups has driven energy costs in Nelson Mandela Bay to be among the highest in the world, a public hearing was told yesterday.
And, as a result of this cost and the proposed 16% Eskom electricity tariff increase, there would be more business closures, job losses and a continuing negative effect on investment decisions.
A Nelson Mandela Bay Business Chamber leader said five energy-intensive automotive component suppliers in the metro had already reported 922 lost jobs during the 2011-2012 financial year as a result of high power costs.
The message was delivered at the Summerstrand Hotel yesterday during a hearing by energy regulator Nersa. The hearing was later adjourned after Cosatu protests.
Two representatives of the chamber's strategic resources task team – Autocast SA executive director David Mertens and task team head Angus Clark – made the presentation.
They said while Eskom boasted it was providing electricity at a cost-competitive rate compared to global prices, the majority of industries in South Africa were not able to connect direct to Eskom and thus had to pay a premium municipal tariff.
"Eskom and municipalities see industry as a milk cow but now the problem is that these milk cows are going to be sold off and put to pasture," Clark said.
Electricity prices had tripled recently, he said, adding: "Municipal mark-ups of up to 50% are a catastrophic reality for industry and business. This is an unfair and unconstitutional taxation. Customers receiving identical services from government are taxed in a different manner. Municipal mark-ups will switch the lights off in South Africa."
Eskom executive Mohamed Adam said earlier the energy supplier believed there was a need to engage on municipal mark-ups.