Centlec tariff hikes threaten 5000 jobs and cut off the hands that feed Mangaung

29 November 2019

While previous rental agreements for industrial premises between businesses and the Free State Development Corporation (FDC) in the Industrial Park at Botshabelo included electricity, businesses are now required to pay for electricity directly to Centlec.

Centlec have increased the electricity by as much as 500%, compared to previous FDC tariffs. These increases have made it unaffordable for many factories at Botshebelo to stay open.

The result is that many of the business owners are reconsidering the Industrial park as a viable place to produce their goods.

Many are now considering closing and moving their factories to other provinces. There are approximately 5000 jobs at stake should they start to close early in the New Year.

The Free State, and especially Mangaung, cannot afford more job losses in already vulnerable economic and municipal service delivery environments in the Free State.

Economic activities take place within municipalities, which in the Free State are not investor friendly. The DA has called for incentives on rates and taxes and basic services to generate investment in the Industrial Park and bring large scale employment closer to the people of Botshabelo.

Centlec is an entity established to buy electricity from Eskom and then provide this electricity to Mangaung and ten surrounding towns. It is ironic that Mangaung Metro is the sole shareholder of this electricity distribution company.

This entity, together with Bloemwater, only serve to increase costs of basic services such electricity and water to businesses and residents. The DA regards both Centlec and Bloemwater as parasitic institutions that only serve as additional and unnecessary layers of municipal bureaucracy and sources of jobs for cadres in Mangaung Metro.

I have written to both the Premier of the Free State, Ms Sisi Ntombela, and the MEC for the Department of Economic, Small Business Development, Tourism and Environmental Affairs, Mr Makalo Mohale, with a request for intervention. It is crucial that the Provincial Government intervene and liaise between the various stakeholders in order to find viable solutions to the economic challenges faced by employers and the threats of job losses of employees.

Issued by Roy Jankielsohn, DA Leader of the Official Opposition in the Free State Legislature, 29 November 2019