Eskom tarrifs' not for small business

Small business cannot afford continuous electricity increases from Eskom and municipalities, Free State commercial property owner Wim Boshoff said on Monday.

"Businesses are leaving the zoned business areas and starting to trade in the residential areas illegally to survive," he told a hearing of the National Energy Regulator of SA (Nersa) in Bloemfontein. Boshoff pays millions for his monthly electricity bill from the Mangaung metro.

He said small and medium-size businesses could no longer afford to pay high electricity costs in formal, zoned business areas. Malls and office blocks were starting to empty as businesses were closing down or moving to areas where they could pay residential tariffs.

Boshoff said electricity increases of 16 percent per annum over the next five years would cripple South Africa's commercial property market, and specifically the Bloemfontein area further. He said Eskom's proposal did not include the municipalities' increase.

"These municipalities are not managing their resources properly and as a result, they need to supplement their income with huge increases in their electricity tariffs to create more income." Boshoff was supported by Louis Diedericks from Utility Management for Africa, which managed large properties for clients.

"The high costs for businesses in central South Africa are not sustainable. You cannot kill the goose who lays the golden egg," Diedericks said.