JOHANNESBURG, 30 JULY 2020 – The Steel and Engineering Federation of Southern Africa today welcomes the decision by the National Energy Regulator of South Africa (NERSA) to appeal the high court judgment that set aside its decision on Eskom’s fourth Multi-Year Price Determination (MYPD4) for the 2019/20, 2020/21 and 2021/22 financial years.
SEIFSA Chief Executive Officer Kaizer Nyatsumba said the Federation shared NERSA’s concerns that, if left uncontested, the judgment will not only disrupt the beleaguered industry, but it will further suppress broader economic recovery, considering the current threat facing the economy.
“We believe this appeal is of utmost importance as the judgment undermines NERSA’s ability to ensure electricity consumers are not burdened by Eskom’s financial inefficiencies,” Mr Nyatsumba said.
Mr Nyatsumba said, as was articulated in a statement released yesterday, SEIFSA believes the ruling is bad news for the Metals and Engineering (M&E) sector because local companies will have to absorb additional shock in the form of increased electricity prices, at a time when the country is buckling under a struggling economy, aggravated by the negative impact of the COVID-19 pandemic.
He said with energy being an essential input to local businesses and representing a large share of the turnover of primary steel producers, any further increase in electricity costs will have a negative ripple effect on other sub-industries, further slowing down production and growth in the sector and worsening the country’s unemployment crisis.
Mr Nyatsumba said the Federation wishes the national regulator well in its appeal, with the primary objective being business sustainability and safeguarding jobs.