Although I agree fully with Annette Lovemore’s take on Eskom (“Metro residents can’t afford hikes”, October 19), it brought to mind the old idiom of the pot calling the kettle black.
Residents of the metro have been complaining about similar tariff hikes in water, sewerage, refuse and property rates imposed by the NMBM itself for similar “reasons” as given by Eskom, which it now slates.
Eskom is pricing itself out of the market, forcing business and citizens who can afford it to look at alternative sources of power.
This happens when your sales decline, and you fail to adapt your overhead and operating costs in line with your sales.
In business it would be termed inefficiency and uneconomic operation.
Unfortunately, with our government institutions, the term “economy of scale” does not apply as it does in business.
“Uneconomies of scale” seems to be more appropriate a term to use for the government. The bigger the setup, the bigger the loss. Lovemore shows little regard for the “residents who can’t afford hikes” when she states that she cannot foresee any electricity increases to metro residents that exceeds 8%, a figure already above the inflation rate.
She further states that for an 8% increase to residents, Eskom must contain its increase to 5% or less.
So what you are saying, Ms Lovemore, is that the NMBM wants an extra (5×1.6=8) 60% on top of what Eskom wants.
That is really considerate of you towards the residents!
Although the NMBM cannot be blamed for the current drought which has led to lower water consumption, the NMBM refuses to suffer with the residents and, like Eskom, the NMBM increases the price of water to recover at least (if not more than) its income in periods of plentiful water reserves despite lower treatment and pumping costs.
This is further proof of your consideration towards the overburdened ratepayers of the metro.
As you also head up infrastructure and engineering, Ms Lovemore, you and your mayor must realise the limits cross-subsidisation can be taken to.
Your average resident is at the end of his financial means and pushing him too far will not help the cause. A bankrupt resident becomes a liability and drops off your “asset list” as an income source.
Politicians should learn that there are times when saying nothing is best, at the risk of exposing their hypocrisy.
Hennie Wepener, Walmer, Port Elizabeth