IF Eskom gets its proposed tariff hike of 35% each year for three years, about 500000 jobs will be lost, the SA Chamber of Commerce and Industry (Sacci) said in Midrand yesterday.

Spokesman Peggy Drodskie told a public hearing of the National Energy Regulator of SA (Nersa) on the proposed hike that inflation would increase by about 0,3%.

“This would then put inflation outside the SA Reserve Bank’s target range of between 3% and 6%,” she said. Both personal disposable income and household consumption would be reduced as a result of the proposed hike, Drodskie said.

“Sacci estimates that the overall loss to GDP would be about R200- million on the most conservative basis.” She went on to recommend that provisions in the National Energy Policy be implemented with the introduction of private participation in generation being fast- tracked.

“Sacci recommends that Eskom be granted an inflation-related increase for 2010/11, and that this period be used to develop a strategy that will provide South Africa with a sustainable electricity supply at a reasonable tariff.”

Business Unity SA (Busa) chief executive Jerry Vilakazi said Eskom’s proposed tariff hike could delay the country’s economic recovery.

“If the 35% increase is accepted by Nersa, we can wave goodbye to an immediate recovery of South Africa’s economy,” he said.

Sacci said the majority of its members had indicated in a recent survey that the only level of increase in electricity tariffs they could accommodate was inflation plus 3% to 5%. It highlighted the need to realistically consider all input and operational costs.

Sacci pointed out that conservatively, inflation was likely to increase by about 0,3% which would put inflation outside the target range of 3% to 6%.

It is estimated that about 500000 jobs would be lost. The ripple effect would reduced personal disposable income and therefore household consumption expenditure.

SACCI announced that it had already started a process whereby stakeholders will be involved and had convened a colloquium that would take place in Johannesburg on February 2.

Meanwhile, Business Unity said that while Eskom’s proposed tariff hike would bring in R18,2-billion for the first year for the parastatal, the cost to the country’s economy would far exceed this amount.

Another consequence for a company such as a gold mine would be a R300-million an annum increase in electricity prices.

“The impact is the same for other leading industries.” – Sapa