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Vol 50 No 24

Published 4th December 2009

South Africa

The other power struggle

Efforts to raise electricity tariffs and tackle underinvestment in the energy industry prompt rows with government and the trades unions

A financing crisis in the state-owned power company, Eskom, threatens the government's hopes of more investment in manufacturing and services. On 30 November, Eskom applied to the National Energy Regulator of South Africa for leave to increase its tariffs by 35%; its original bid had been a 45% hike, which the government deemed too provocative. But business interests claim that even the lower rate would shut down companies and cost jobs. Successive governments have for decades kept power tariffs down without funding the necessary investment. Now, say the business people, the country could within three years have the world's most expensive electricity. Public hearings on tariffs are due in January and NERSA will make its final decision on 24 February.

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