Page 8 - KZN Business Sense 8.1

BUSINESS CHAMBERS CHALLENGE MUNICIPAL

ELECTRICITY TARIFF METHODOLOGY

Sibongile Dimbaza to cross-subsidise other
municipal functions. If tariffs
he Pietermaritzburg are approved without the
and Midlands Chamber efficiency of the costs being
T(PMCB) together with the interrogated, there is no real
Nelson Mandela Bay Business incentive for municipalities to
Chamber (NMBBC) have jointly spend electricity income on
filed papers to legally challenge infrastructure or to address
the National Energy Regulator’s theft, waste, fraud and
(Nersa) municipal tariff corruption in the electricity
methodology which is used to system.”
determine and approve electricity “The private sector is simply
tariffs charged by municipalities. expected to carry the cost of these
The methodology is based on losses and inefficiencies. With
guidelines and benchmarking Eskom’s tariffs having increased
rather than on the cost of supply by around 180% in real terms over
which is being stipulated in the the last 15 years, municipal tariffs
legislation. This methodology is have to be limited to efficiently
thus an enabler for municipalities incurred costs. Our joint action
to implement excessive tariffs on behalf of our members will
and then to utilise this to fund hopefully achieve this. We trust
escalating electricity losses embark upon a legal challenge incurred cost of supply plus a such an environment, continued we can co-operate with our
which are the result of their own to halt the implementation of reasonable margin.” excessive mark-ups from municipalities and come up with
inefficiencies, among which unlawfully high tariffs, which municipalities will exacerbate solutions which will enable growth
includes the lack of maintenance will result in industry paying “We are very concerned about pressure on municipal and development.”
of infrastructure as well as for inherent inefficiencies in the the current dysfunctionality consumers and in particular on Van Huyssteen emphasises
rampant cable theft. This has system,” says Melanie Veness, of the external operating businesses who are dependent that should a positive outcome
resulted in tariff differentials CEO of the PMCB Chamber. environment and the associated on electricity for the continuity be achieved, that this would
between distributors in South “Our challenge seeks for the unacceptable escalating costs of of their operations. This ultimately benefit all South African
Africa being as high as 60%, methodology for municipal doing business and in particular is clearly an unsustainable businesses and consumers.
creating unacceptable regional customers to be based on the the sustainability of electricity situation for businesses who
distortions in electricity costs supply,” says Denise van are reeling from the economic She says that the electricity
across the country. efficient cost of distributing Huyssteen, CEO of the NMBBC. repercussions of the pandemic challenge is being funded by
electricity, excluding mark- “The continued unlawfulness of member businesses of the two
The two Business Chambers ups which are not permitted the municipal electricity tariffs and the July civil unrest.” Business Chambers. “We urge
have participated in year-long for municipal customers. “We could lead to uncontrollable Veness points out that other businesses to stand together
consultations on this issue where believe that the guideline and escalations from current tariff electricity income accounts with us and to join our legal
Nersa has confirmed that they will benchmarking methodology levels. Furthermore, business for a substantial portion of the challenge so that we can prevent
not review their methodologies is inconsistent with electricity is under tremendous pressure total revenue of municipalities. exorbitant and unfair electricity
without a legal challenge. “We legislation and therefore unlawful, in relation to electricity pricing “The reality is that electricity increases being imposed and
have therefore determined that and as such licensees should only as Eskom is applying for income is not spent exclusively impacting the sustainability of
we have no other option but to be permitted to recover efficiently- increases exceeding 20%. In on electricity and is utilised business operations.” 

DOING BUSINESS WITH PAKISTAN

he Durban Chamber of ■ Mobile devices 8. Must be within sectors
Commerce and Industry ■ Chemicals specified on the link.
TNPC in partnership with ■ Safety equipment
the Pakistan Embassy presents the Date: Friday, 25 February 2022 –
opportunity to travel to Pakistan ■ Gems & Jewellery Sunday, 27 February 2022
for FREE to attend a business ■ Packaging
trade delegation. ■ Agriculture machinery & Click to Register:
its implements https://ehcs.tdap.gov.pk/
Requirements:
■ Electrical machinery including Once registered, kindly email
1. A company must be in the pumps, motors, transformers,
Engineering and/or generators your:
Healthcare Sector ■ Marble & Minerals 1. Application
■ Construction material 2. Be willing to pay a RETURN 2. Company profile and,
■ Surgical instruments flight ticket which will be 3. Financial statement
■ Sports goods reimbursed to you once you
■ Musical instruments arrive in Pakistan. To Dumile Khubone,
(khuboned@durbanchamber.
■ Automotive / Autoparts 3. Have a visa and passport ready co.za) or call 031 335 1000.
for travelling

■ Cosmetics 4. Be fully vaccinated to travel NB: Only nine (9) companies
■ Pharmaceutical 5. Be available to exhibit the will be selected to participate.
■ Electrical Fan/Home Appliances company service/product in The Pakistan Embassy reserves
■ Furniture & mattresses Pakistan the right to select eligible
■ Rubber & its implements 6. Have a turnover of one million participants.
■ Handicrafts US Dollars per annum #InBusinessForABetterWorld
(negotiable).
■ Plastic & its implements
■ Stationary & Paperboard 7. Submit a company profile
and recent financial statement

■ Cookware & Cutlery for screening.

8