Cape Town – Director of the Economic Modelling Academy, Dr Pali Lehohla, says Nersa's decision to grant Eskom an 18.65% electricity tariff hike will pit the poor against the rich considering the country's economic challenges.
Pali says the power utility Eskom is headed for privatisation following Nersa's decision to grant Eskom an 18.65% electricity tariff that will come into effect on the April 1.
Speaking to Newzroom Afrika, Pali compared Eskom’s situation to Chomsky norm where he talks about the technique of privatisation.
“The standard is that you defund and make sure that things do not work, people get angry and then you hand it over to the private sector. Through all the paths, the poor will always be taken to the wall because they cannot afford,” he said.
“The statistician-general has just gone up including the property line and the upper bound will be at R1 800 and the level at which the poor have to be compensated, or provided to meet their basic needs, but out of that you increase electricity by 18% you defeat the purpose.
“So in the process of governance you find a very conflictual approach to governance of economics and this pits the poor against the rich and that's the space in which we are.
“So the context we are seeing at Nersa having no choice but to increase this to 18% has root cause in our conflicted policy space which is highly contested,” he said.
Lehohla emphasised that Eskom was corporatised in 2000 and before then, it had performed as the best institution getting credit higher than sovereign itself when it was not corporatised.
“There was no sickness. The sickness starts with privatisation and subtle privatisation and then the issue of energy transition comes into formula as we saw it now closing working station coal power stations that were pumping thousands of megawatts,” added.
He argues that there are many factors that point to the vested interests that have led Eskom to be bankrupt and in a bad state, resulting in the power to suffer.
IOL