Submission on Eskom’s Revenue Application Multi-Year Price Determination – 2013/14 to 2017/18 (MYPD 3)

01 November 2012
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Comment on Eskom’s Revenue Application

Multi-Year Price Determination – 2013/14 to 2017/18 (MYPD 3)

This comment on Eskom’s MYPD 3 revenue application is submitted on behalf of the people of South Africa.  The Free Market Foundation (FMF) is an independent non-profit public benefit organisation founded in 1975 to promote and foster an open society, the rule of law, personal liberty, and economic and press freedom as fundamental components of its advocacy of human rights and democracy based on classical liberal principles.

In carrying out its mandate the FMF is duty bound to put forward policy proposals that have the potential to bring about the greatest long term benefits for South Africa’s people. Regrettably, the FMF is also compelled to warn policy makers when policies which they propose to implement, or have been requested to implement, have the potential to inflict irreparable long term harm on the economy and the country’s people.

2.       Resolving South Africa’s electricity crisis

That the country has not suffered rolling blackouts in the past year conceals more than it reveals. Major harm has been suffered through manufacturing and mining investment not being carried out, the stalling of real estate development, the reduction in GDP and FDI, and jobs lost due to the withholding of electricity supply from developers. Keeping the lights on has come at a considerable price.

Solving the electricity crisis and avoiding irreparable harm to the economy requires a change in some of the assumptions contained in Eskom’s MYPD 3 revenue application. This comment provides alternatives to implicit assumptions contained in the document. 

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Comments on Submission on Eskom’s Revenue Application Multi-Year Price Determination – 2013/14 to 2017/18 (MYPD 3)