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ALLOW EEC TO LIQUIDATE - BUSINESS COMMUNITY

By BONGIWE DLAMINI | 2024-11-27

“LET us allow EEC to liquidate and see if no one will intervene.”
This was a submission by a member of the business community Mbuso Mtsetfwa working for Polypack during the stakeholder engagement on Eswatini Electricity Company’s (EEC) proposed electricity tariffs.

The meeting was hosted by Eswatini Energy Regulatory Authority (ESERA) at Happy Valley Hotel yesterday. The meeting was scheduled specifically for the business sector and government ministries.

Before the stakeholders were afforded the opportunity to make their submissions, EEC Managing Director Ernest Mkhonta said the parastatal needs to be financially sustainable in order for it to be able to continue providing service to the nation.

However, since the company’s previously proposed hikes were suppressed, and it was awarded less than it had requested from the regulatory authority, the company had encountered financial challenges so much that it even bought power from South Africa’s Eskom using overdrafts.
Without the electricity tariff hikes, Mkhonta said the company would be forced to take out loans or face liquidation.

Mtsetfwa from Eswatini Polypack said he understood the proposed tariff hikes of 25.51 per cent and 27.6 per cent over the next two financial years of 2025/26 and 2026/27, respectively.
However, he asked if Mkhonta had sought government’s intervention in the matter.

Subsidise
He said as a government entity, EEC should consider requesting government to subsidise electricity. Mtsetfwa made an instance about other governments who subsidised companies by refuelling vehicles, which by extension helped cushion clients.

Otherwise, Mtsetfwa submitted that some businesses would not be able to pay the high cost of electricity should EEC’s proposed tariff hike is approved by ESERA. He made an instance of his company, Polypack, which he said currently utilised E1.2 million worth of electricity per month.

After the proposed average tariff hikes is approved, Mtsetfwa said the monthly electricity bill would increase to about E1.3 million. Therefore, Mtsetfwa suggested that EEC should be allowed to liquidate if need be.

“Let us allow EEC to liquidate and see if no one will intervene in the matter. If the entity that is meant to intervene realises that we as clients are able to sustain the company, they might not come to the party,” submitted Mtsetfwa.

He emphasised his optimism that if the company could be close to liquidation, a solution would be brought forth by the relevant authority.

“Currently, it looks like we are able to raise funds for EEC, yet the company is targeting us. We, as consumers, are an easy target for EEC who runs to us every time it needs money.

That is not how a business should be run,” added Mtsetfwa.
Further, he mentioned that EEC imposed hikes on clients because the latter had no other option as the company enjoys monopoly. Otherwise, he said clients would ditch EEC for another service provider if it were available.

“If we allow EEC gets what it wants now, it could negatively affect businesses to a point where they would could be forced to close. When that happens, it would be as though the companies had closed due to lack of funds, and the fact that the expensive power costs had contributed to the closure would not be considered,” stated Mtsetfwa.

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