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BUSA concerns over Eskom tariff increases

16 November 2007 – Business Unity South Africa (BUSA) has voiced its concerns about Eskom’s planned tariff increases and their inflationary impact on the economy.

Simi Siwisa, BUSA economist said that while BUSA understood the need for the increased tariffs, a double digit increase would be counter productive, due to the strong correlation between the Eskom price increase, inflation and economic growth.

"Thus the planned increases are particularly concerning given the slowdown in local and global economic activity which is expected to continue in 2008," he said.

BUSA said it was concerned about simultaneous tariff increases that may be required for other infrastructure expansion programmes.

The organisation stressed that proper sequencing and prioritisation of increases was needed to offset any unintended consequences of expansion programmes.