ENERGY: Eskom Applies for Further Increase in Tariffs
Recent Gauteng Business News
The power utility is cash strapped and generation has been under severe strain.
Eskom has applied for an additional hike of around ten percent in electricity tariffs. The Cape Town City Council has told news agency Reuters that the proposed nine-point-five per cent hike will be on top of a 12-point-nine per cent increase that has already been approved.
The increase, if granted, will result in a staggering 22-point-seven percent increase in electricity for the 2015/16 financial year.
The shock announcement comes on top of the news that the cash-strapped utility's international credit rating has been reduced to junk status.
Ratings agency Standard and Poor's says the suspension of the CEO and three other senior executives has led to less confidence in Eskom's corporate governance as well as its credit profile.
It has lowered long-term ratings on Eskom to BB Plus. Eskom faces a funding gap of up to R200 billion as it struggles to keep the lights on and build new power plants.
Business News Sector Tags: Energy|