Emfuleni Municipality at loggerheads with local businesses

Gauteng's Emfuleni Municipality is at loggerheads with local businesses that threaten court action over the decision to increase electricity tariffs. #DStv403

JOHANNESBURG - Gauteng's Emfuleni Municipality is at loggerheads with local businesses that threaten court action over the decision to increase electricity tariffs.

The squabble was sparked by the municipality's decision to set aside apartheid-era contracts which subsidised electricity consumed by large factories.

NERSA has approved new tariffs which businesses say will collapse their operations.

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Emfuleni Municipality owes Eskom R1.6-billion for electricity.

The municipality partly blames this on a controversial 1987 agreement entered into by the erstwhile town council, allowing industries to buy electricity at a cheaper price.

According to Emfuleni Municipality CFO Andile Dyakalma, "The large power users have been getting what I call a subsidised tariff, which is not approved by NERSA, which is a contravention of the municipal finance management act, at a huge loss. We're talking about R600-million a year that has been lost."

Businesses agree the apartheid-era agreement had to be reviewed, but they say the new tariffs threaten their balance-sheets.  

The municipality says NERSA has approved a 20 percent tariff increase, and failure to implement it will financially collapse it.

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Finance MMC of Emfuleni Municipality Robert Thema, "We need to enter this dialogue with all honesty, businesses should be able to open up their books, because it's one thing to say you'll lose, you're going to fire people, but in actual fact when we check your books we find that you're way above the bottom line that you've been accruing for not paying the cost-reflective tariffs."

With the two parties still poles apart, it's small wonder business is now heading to court to adjudicate the impasse.

Source
eNCA