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South Africa: Investment Council Endorses Electricity Strategy
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BuaNews (Tshwane)
19 May 2008
Posted to the web 19 May 2008
Bathandwa Mbola
Durban
The 13th International Investment Council (IIC) endorsed government's emergency strategies to deal with the current electricity shortage at the weekend.
The meeting, which was attended by President Thabo Mbeki, Deputy President Phumzile Mlambo-Ngcuka, cabinet ministers and investors was held in Margate, south of Durban.
However, the council urged that shortcomings in the maintenance of Eskom's power plants receive urgent attention and that investment in new plants be accelerated.
At the beginning of the year, the country was plunged into a power supply shortage due to the increased demand for energy, owing to the high rate of growth and the continued reliance on coal as a primary source of energy.
Investment council member, Percy Barnevik, said he hoped the country would pull out of the crisis soon.
"The short, medium and long term measures seem to be working," he told the media adding that the council was satisfied that the country will pull through the current electricity crisis.
For the short term, government has requested businesses to reduce their electricity consumption by 10 percent.
Asked whether the electricity crisis had dented South Africa's international standing, Mr Barnevik said the sub prime crisis and the rising oil price had cast a dark cloud over the world, while South Africa had continued to benefit from strong demand for commodities.
In light of South Africa's low electricity prices, the council agreed that a price increase was inevitable and necessary to encourage investment in electricity and change behaviour.
Another council member Sam Jonah said it was reassuring there had been a consultative process where there seemed to be broad agreement, referring to the National Stakeholder Summit on Electricity last week, where it was agreed that electricity price hikes would be smoothed over five years.
The summit said Eskom would re-submit its application to the National Energy Regulator of South Africa (Nersa) on the proposed tariff hikes.
Government, labour and community forums were represented at the summit.
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The delegates determined that government should pump more money into Eskom to maintain its financial health and credit rating.
I know I am adressing here another cornerstone of the ANC government.State owned enterprises should be thrown out the window.Privatise and back to efficiency!
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