Business enterprises in the Tygerberg area are facing more economic hardships and even close-down as Eskom is pushing for a 20,5% electricity hike.
Chair of the Tygerberg Business Chamber Sunél Beeselaar says businesses that could afford to remain open and/or pay increases during the pandemic could only do so based on inflation.
“Neither businesses nor individuals can afford the difference between inflation-based increases and the proposed 20,5% hike. This increase unfortunately causes a ripple effect to all other products and services that will without doubt cripple the already crumbling economy,” she says.
The Tygerberg Business Chamber is affiliated to the AHI Western Cape and represent businesses in the northern suburbs of Cape Town with the centre of its membership in the larger Bellville, Brackenfell and Stikland areas ranging from small businesses to large corporations across the spectrum.
The Tygerberg Business Chamber consists of approximately 80 businesses small/medium and corporate within the northern suburbs.
“Members of the Tygerberg Business Chamber take note of and agree with the statement made by Cape Town Major, Geordin Hill-Lewis rejecting Eskom’s application to hike the electricity price by 20,5% in the 2022-2023 financial year.”
According to Beeselaar this proposed increase spells absolute disaster for the economy at a time when many local businesses are struggling with recovery post-Covid.
She says the proposed increase is unjustifiable.
“Eskom’s electricity tariff increase should be reviewed as we believe that some households and businesses might not be able to survive this.”
Managing member of the business chamber Phillip van Zijl says an electricity tariff increase of 20,5% is absurd as the past two years had a huge impact on local business.
“Several of them had to close doors while others are still struggling from month to month to keep their doors open. During the same period we experienced serious loadshedding by Eskom and this had a devastating effect on a large number of our members and every business had to spend additional capital to obtain alternative power sources in order to keep their businesses running,” he says.
“Money was spent on solar solutions, back-up batteries, inverters, UPS devices and generators. As we all know generators run on fuel, the cost of which has also increased substantially over the past two years.”
He says this does not calculate the losses of businesses due to electronic and other equipment that was damaged as a result of load shedding, resulting in replacement cost.
“In several cases continuous production process businesses that cannot handle “start/stop” events as caused by load shedding has suffered huge losses of raw material and loss of production time when plants have to be shut down, cleaned and restarted. If we consider that each and every one of these businesses has paid their taxes for years in order to maintain the countries infrastructure which include a stable power network, then it is unthinkable that they should now also stand good to finance the budget of Eskom that mismanaged their finances and failed to maintain infrastructure.”
Van Zijl says businesses can only increase their product and service pricing in line with inflation. “Price increases above inflation will not be accepted by the consumer and could further reduce market share of especially the small to medium business that is currently fighting for survival.
“Many businesses will simply just not be able to survive this excessive increase and do not have the capital to invest in off- grid solutions. Jobs will be lost and the struggling economy placed under more strain.”
