Granting Eskom its requested 19.9% electricity tariff increase would deliver a near-fatal blow to the struggling metals and engineering (M&E) sector.
That was the message from Steel and Engineering Industries Federation of Southern Africa (Seifsa) chief executive officer, Kaizer Nyatsumba, during his presentation at the national energy regulator’s (Nersa) public hearings on the tariff application today (Monday).
He emphasised that allowing such an increase would cripple the manufacturing sector as it would worsen the situation for the ailing M&E sector and would be a critical setback for productivity.
“The steel and engineering sector is still struggling to meet the pre-crisis demand production levels attained in 2007,” said Seifsa chief economist Michael Ade. “Since then, recovery in production has been modest at best.”
He said that acceptance of Eskom’s application would inevitably lead to more job losses in the sector.
He pointed out that if Nersa believed that an increase for the power utility was necessary, then it should be at a much lower percentage than requested as the sector exported 40% of its production, and international competitiveness was vital for its survival.
