Public Enterprises Minister Malusi Gigaba has launched a new, consultative approach to the determination of Eskom’s tariff increases in the hope of getting more "buy-in" before the next three-year tariff application is made to the regulator.
The new, three-year cycle of electricity tariff increases will come into effect on April 1 next year. While Eskom has not given any indication of the kind of increase it will request, it has indicated that steep increases will continue to be necessary to fund its large infrastructure build programme.
However, earlier this year Eskom discovered that due to its improved financial position and concessions from the government regarding its return on assets, it was possible to lower the rate of the increase for the third, and final, year - from 25% to 16%.
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This was after a request by President Jacob Zuma in his state of the nation speech in February to Eskom to reduce the price increase requirement "over the next few years".
Mr Gigaba has begun consultation with his Cabinet colleagues, meeting Trade and Industry Minister Rob Davies this week. Mr Davies, who regards himself as the champion of manufacturers, is intent on keeping tariff rises low.
There are also plans to meet Finance Minister Pravin Gordhan, Energy Minister Dipuo Peters, trade unions, organised business and non-governmental organisations.
In the past, Eskom drew up the tariff application, obtained the endorsement of the Department of Public Enterprises, and submitted the application to the Treasury. It then went to the National Energy Regulator of SA (Nersa).
Mr Gigaba said the idea was to get buy-in from all stakeholders before Nersa’s hearings, held in public.
"We have started meeting with various critical stakeholders, including government, trade unions and business," he said after a briefing with organised business on his budget vote in Cape Town yesterday.
Mr Gigaba told the briefing he planned to hold a "transformation summit" for state-owned companies in July "to align state-owned enterprises with the vision" of his department.
His spokesman, Mayihlome Tshwete, said the summit would examine the procurement budgets of state-owned enterprises with a view to leveraging these to create opportunities for black-owned enterprises.
A start had been made with the award of Transnet’s external auditing account to black-owned accounting firm Sizwe Ntsaluba Gobodo.
Eskom and Transnet command large procurement budgets. Transnet’s capital expenditure budget is R300-billion over the next seven years, while procurement for operations is R62-billion.
Eskom’s capital expenditure budget is R330-billion over the next five years, while procurement for operations is expected to be R150-billion.