Chairperson of the Energy Intensive User Group, Ian Lanridge, says Eskom should urgently review how it plans to fund an expansion project aimed at avoiding repeats of blackouts that shut down mines in 2008.

Lanridge says that Eskom should consider selling an existing power plant to close a funding shortfall. Members of his group, including units of BHP Billiton and Anglo American, has reduced output in 2008 after Eskom limited electricity supplies.

Eskom is proposing to increase tariffs by 35% a year for three years to improve its ability to borrow funds for expansion. However, even if that is approved, Eskom still faces a shortfall of about R30 billion in its R385 billion five-year expansion.

Yesterday, Business Unity South Africa CEO Jerry Vilakazi warned that Eskom’s proposed 35% tariff hikes could cost SA 200 000 jobs and delay the economy’s recovery from recession. A 35% hike!

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