Natural gas fields off the West Coast

November 15, 2009 by: admin

BUSINESS views the debacle at Eskom with dismay because it shows that “Eskom does not have a clear plan to overcome the huge and costly challenges facing it and the entire energy sector in South Africa.”

This was said by Jeremy Wiley, outgoing president of the Cape Chamber of Commerce at the organisation’s annual general meeting in Cape Town yesterday.

The ongoing management and financial problems at Eskom had been “a source of increasing concern to the Chamber because of the ever present threat an unreliable and interrupted power supply poses to economic recovery and future growth.”

He said “the Chamber does not believe that Eskom’s request to the National Energy Regulator for an almost 400 percent increase in electricity tariffs over four years is either financially justifiable or sustainable for either private consumers or business.”

The exorbitant increases would drive up inflation in a way last seen in the mid-1980’s. “No private business would even get out of the starting blocks if it projected price increases to its clients at anything much more than the rate of inflation.”

The Chamber urged the Government to support the Eskom Board so that it could fulfil its statutory mandate to manage the strategic utility in terms of best business practice and to further encourage and assist independent power producers to enter the market.

Turning to the City Council, Wiley described the recent 15.8 percent rates increase on commercial property as “punitively high” and said that this increase coupled with the 34 percent electricity increase in July put operating costs of already stressed businesses under even greater pressure.

“There is no justification for business property owners to pay annual rates increases exceeding the rate applied to residential properties, especially since hundreds of businesses pay an additional levy to augment municipal services in many commercial and industrial areas of the City.”

He welcomed the progress made towards the exploitation of the natural gas fields off the West Coast and said that this would not only provide a cheaper and cleaner way to generate electricity in peak hours but would also provide many industries with a viable alternative to electricity.

In particular, the gas supply would benefit the proposed Saldanha Bay IDZ in which “green and sustainable energy” would play an important part.

He reiterated the Chamber’s commitment to transformation which he saw as a business imperative. He said the about 70 percent of new members from the small and medium business sectors were black and the Chamber ran dozens of training and personnel development courses to assist emerging businesses.

Wiley said the Chamber rejected the recent study which concluded that Cape Town was a racist city as biased and one-sided. Professional recruiting agencies had advised the Chamber that there was a country-wide shortage of experienced black managers and professionals and that the majority were attracted and retained in the Gauteng area where there were more posts and higher salaries than in any of the coastal cities.

“To perpetuate the perception that Cape Town is racist not only retards transformation but it is contradicted by the reality that the city region is one of the most cosmopolitan in Africa.”

News from http://www.cbn.co.za

News sponsored by West Coast Office National

Filed under: Gas,IDZ
Tags: ,