Eskom’s tariffs more than doubled in real terms from 2008 to 2014. In response, energy-intensive refineries downsized and other businesses and households used less electricity where they could. By 2017, demand for electricity was 9% lower and the electricity intensity of GDP had fallen 25%. Eskom’s response? It is suing the National Energy Regulator of SA (Nersa) to raise tariffs by about 20%. The electricity utility, it seems, is run by Dadaists. Meanwhile, the South African National Roads Agency (Sanral) funded enormous new investments in Gauteng without asking how much more people would pay to end traffic jams and potholes. Its initial exorbitant tariffs fuelled a payment strike and despite much-reduced tolls, many drivers still don’t pay. Sanral’s revenues from Gauteng are hence less than half of expectations, leaving it with a financing gap. These examples affect the economy, adding to production costs and leaving major state entities in severe financial difficulty. But they al...

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as exclusive Financial Times articles, ProfileData financial data, and digital access to the Sunday Times and Times Select.

Already subscribed? Simply sign in below.

Questions or problems? Email or call 0860 52 52 00. Got a subscription voucher? Redeem it now