The human face of recession.

[tec0]

Well, what is government doing? Right we all know that the power increase is coming and we all know that of small to medium businesses will be hit the hardest. Especially people using electrical equipment to earn their money.

Now with a power increase like this every aspect of your production will become more expensive and you will not be able to be competitive enough against “imports� So more to the point if “they� can “import� your product by end of 2010 they will do so because chances are it will be financially feasible.

It is these factors that come to play along with the following:

It is known that that negotiations exist where our power facilitator hopes to “shut down� production so that there will be enough power for the “Soccer World Cup� Imagine the losses these companies will face. But there will be “penalties� these “penalties� Our power facilitator will have to pay these “penalties� and they are estimated to be in the billions. <- we are paying for that.

So clearly, the South Africans will be picking up the bill after 2010 and we will pay and continue to pay a yearly increase until we cannot pay anymore. This is the “big plan�

The point I am making is that the South Africans are paying for everything but, where is our national security, health care systems and long term job creation? Where are our benefits?

[AndyD]

South Africa is not Europe or the USA with very large middle classes where these costs are spread across a larger percentage of the population. The smaller the group the more it's going to hurt.

[Dave A]

Andy, you might have nailed down the real reason the increase has to be so big.

[tonyflanigan]

@ Dave and Andy. Will the financial impact on contributing South Africans still be as great if our non-electrical producing neighboring countries pay for the electricity that is supplied to them?

[AndyD]

@ Dave and Andy. Will the financial impact on contributing South Africans still be as great if our non-electrical producing neighboring countries pay for the electricity that is supplied to them?

Do I detect a pointed statement rather than a question here? What neighbours we supply and how much they pay is not something I know much about. Do you have a link to some facts and figures about this?

[Dave A]

I was thinking of all the defaulting debtors of Eskom, but on second thoughts I'm going back to my position that it's a whole pile of issues, chief among them the coal supply contracts.

[desA]

Well, what is government doing? Right we all know that the power increase is coming and we all know that of small to medium businesses will be hit the hardest. Especially people using electrical equipment to earn their money.

Now with a power increase like this every aspect of your production will become more expensive and you will not be able to be competitive enough against “imports” So more to the point if “they” can “import” your product by end of 2010 they will do so because chances are it will be financially feasible.

These electrical increases present an 'opportunity' to folks like me. I have associates involved in Green Energy & Energy Auditing, in the Durban-Pinetown region, who would be happy to assist you to minimise the impact of these price rises.

In reality, SA is about to undergo a paradigm shift in energy usage & the technology used. This is a good thing, in the long term. Don't be afraid of them, there are solutions.

So clearly, the South Africans will be picking up the bill after 2010 and we will pay and continue to pay a yearly increase until we cannot pay anymore. This is the “big plan”

The point I am making is that the South Africans are paying for everything but, where is our national security, health care systems and long term job creation? Where are our benefits?

Consider this to be a tax on the rich class - no matter the background. There is a price to be paid for general stability - in every country.

[Marq]

Consider this to be a tax on the rich class - no matter the background.

I see it as paying for assets we cannot afford and should not have arranged for in the first place. The country is going to pay as a whole, not just the rich class.

There is a price to be paid for general stability

The poor are going to be that much poorer because the overall pot remains the same if not less than before as a result of slow to no growth. This same pot is now going to pay for the finance, admin and maintenance costs of these so called investments. When the dust settles and the country realises that FIFA has all the profits and money and the balance is actually out of the country. The rest of us will be paying off these projects. The labour has to move on to do the roads and other big government projects that are lined up, or it too goes back into the poor pot. The financing of these government projects that should have been the first priority, has no return besides stability in the labour and union sector. Eventually (I think sooner rather than later) this could create instability as funds are still not channeled to the poor and service delivery as requested, demanded and promised does not materialise.

[desA]

What lies beyond the 'edge' of the current 'pot'?

[Butch Hannan]

I was thinking of all the defaulting debtors of Eskom, but on second thoughts I'm going back to my position that it's a whole pile of issues, chief among them the coal supply contracts.

Hi Dave,
You mention the words coal supply contracts which interests me. Almost every single power station has mines captive to supplying them with their requirements on a contract basis. As part of the contracts some of the running costs of these mines are funded by Eskom. Most of these mines are huge and should be capable of supplying the total needs of a power station quite easily. They are all connected by conveyor belt systems to their respective power stations. I suspect that supply by road hauliers was a black empowerment effort by Eskom which went wrong. Just look at the thousands of heavy trucks messing up our roads.
Butch Hannan