The Nelson Mandela Bay (NMB) Business Chamber is “very concerned” about the 11% average increase in electricity tariffs proposed by the metro council.

CEO Denise van Huyssteen says the proposed double-digit increase comes at a time when local business faces several headwinds, including massive fuel price hikes, escalating logistics costs, high import volumes into South Africa, and a lack of municipal infrastructure maintenance.

She says the average 11% increase is not cost-reflective and too high for businesses and consumers to absorb, while there is also no clear action plan to address local inefficiencies in electricity distribution and supply.

Van Huyssteen says the affordable cost of electricity in the metro compared with other global markets used to be a key factor in attracting manufacturers to establish and expand their operations in NMB.

“However, in the last 20 years, Eskom tariffs have increased by 1 040%, compared to an [inflation] increase of 157%, clearly negating such benefits for our economy.

“High, above-inflation increases in electricity costs over several years, coupled with the decreasing reliability of electricity supply, have eroded the competitiveness of local manufacturing against cheap imports which are flooding our market and displacing locally assembled products.

“Moreover, rising electricity costs affect the general sustainability of small, medium-sized and large businesses alike across all sectors of our local economy, which further threatens job sustainability,” says Van Huyssteen.

She adds that unplanned power outages and dips in the metro have intensified and now represent a high risk to the local economy.

“The metro faces a very serious infrastructure management crisis caused by the lack of adequate and routine maintenance over many years, which has severe consequences on the lives of communities and the local economy as a whole.

“Electricity supply failures are rising in severity, with repeated pylon collapses and businesses being subjected to protracted power outages for days, sometimes weeks, on end, in just the first few months of this year.

“Since January 2023, the chamber has recorded 202 unplanned outages across key industrial and commercial areas, an untenable reality which has a direct bearing on the ongoing viability of businesses and their ability to sustain much-needed jobs – and this in a metro which has an unacceptably high official unemployment rate of 29.8%,” notes Van Huyssteen.

The chamber calls on the NMB council to develop an urgent plan of action to ensure that electricity losses are contained and reduced; that effective electricity distribution and infrastructure management are in place; and that security of supply is secured through the monitoring and surveillance of critical assets, such as substations.

“On the issue of electricity losses, it is vital that billing issues are urgently addressed and, in instances where residents and businesses may be stealing electricity, strong action must be taken against these transgressors,” says Van Huyssteen.