With an electricity hike of 17,8 per cent in the City of Mbombela Local Municipality (CMLM) as of July 1, economists have said the impacts of the tariff would be disastrous for the city, especially small businesses.
In the final budget notes, posted on the municipality website on Monday, it said the National Energy Regulator of South Africa (Nersa) had issued a municipal guideline for an National Energy Regulator of South Africa (Nersa) increase of 14,59 per cent.
However, Eskom applied for an increase of 15,06 per cent which was approved as a general increase. According to the final budget notes, CMLM said that “municipalities’ bulk electricity increase is 17.8 per cent”.
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“The additional increase to municipalities is to enable Eskom to recover lost revenue as municipalities can only be charged from July 1, while generally Eskom electricity tariffs increase is charged from April 1.”
Henri Pieters, director of Stabilis Incorporated Nelspruit, said the increase would have a “very serious impact” on the people and businesses of Mbombela.
“The economy was already down before Covid and now it is even worse,” said Pieters. He said the most affected would be small businesses.
“Smaller businesses are the backbone of the economy and Mbombela is made up of mostly small businesses so this will be disastrous,” Pieters said.
Kruger Lowveld Tourism’s chairperson, Oupa Pilane, said it was “really sad” that the increase had been approved especially in the midst of a pandemic when most tourism businesses were not functioning.
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“The municipality is not concerned with the well-being of businesses as there has been no incentives to help small businesses in a meaningful way,” said Pilane.
“We have requested relief, especially for the tourism sector, from local government to say the least it could do is to convert tourism rates and taxes into residential rates instead of commercial while these businesses are not operating, but no one is interested.
“We will continue to try and engage, but only the business sector seems worried about the increase and how other businesses are doing. Local government is sucking the life out of businesses.
“We do not need political statements. We need meaningful intervention,” he said.
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Mbombela DA councillor, Steve Schoeman, said it was inevitable that there would be an increase in electricity tariffs because Eskom needs to be “bailed out”.
“We know Nersa approved the increase a few months ago. The DA will ensure that all consumers in the municipality are getting their fair share of their free basic electricity and that electricity losses are minimised.
“At present there appears to be a problem with the material losses, these are not necessarily physical losses but could be linked to accounting losses.
“The DA will fight for the consumer. This fight is, however, not on a municipal level but rather on a national one,” he said.
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