S-AF: Eskom wants a 60% price hike

Brendan Boyle asked Portia Molefe, director-general of the Department of Public Enterprises, why …

Is the increase Eskom has asked for 53 % or 60%?

It’s 60% nominal and 53% real — nominal would be before you take out inflation.

That’s an awfully big increase, isn’t it?

On the face of it. It looks big because of the percentage, but it moves it from 19c to about 30c per kilowatt hour from Eskom.

But to want three times as much — surely good managers would have seen that coming?

It’s not so much just driven by the quantities of coal and diesel that you’re wanting. It’s also what’s been happening to the price of coal and diesel.

When would the increases kick in?

We’re hoping it will be effective from April 1 2008.

It’s 60% this year. What will it be next year and the year after, and the year after that?

On our modelling, it’s a high increase this year, it’s another relatively high increase next year and then shortly after that we go back to something close to inflation. Even so, we would remain among the three most energy cost-efficient countries in the world.

The Times (S-Af)