Thousands of tenants in South Africa are going to lose the battle to meet the monthly cost of renting their homes unless they and their landlords prepare properly for Eskom's rapid price hikes.
So says Andrew Schaefer, CEO of Trafalgar, the national property managers. "Most people are unprepared for this," he adds.
Eskom proposes increasing the cost of electricity by 45% a year for three years, after raising it 33% this year. Electricity that costs 60 cents/KwHr now is expected to cost R1,60 by 2012. Where the average monthly charge per flat is R800, it will be nearly R2,160. In many cases this will mean monthly electricity costing more than monthly rent.
"In fact it is already happening," says Schaefer.
"We know of one flat in Hillbrow where the tenants are paying R1,700 per month and their electricity is costing R2,900. The flat is overcrowded, occupants have a score of cheap heaters, hair dryers, TV sets and other appliances that gorge themselves on power, and of course the hot water geyser is working all day. Most tenants have not developed an energy saving consciousness."
He says sectional title bodies corporate face the same growing crisis.Common property electricity makes up around 11% of the average levy now.
That will increase to around 15% by 2012. The biggest problems in sectional title buildings is that the body corporate is responsible to the authorities for privately used electricity, so if individuals fail to pay, the rest will have no choice but to carry them. Pre-paid metres will become essential in all buildings.
"Landlords must also beware of organised unrest, with themselves carrying the blame for the higher costs, they can't avoid taking some responsibility for their tenants' growing stress," says Schaefer.
"An immediate way of help would perhaps be to reduce the normal 10% rent increase at the end of the lease, to say 5% if the tenant pays on time, doesn't overcrowd and looks after the property. They can also help educate their tenants in energy saving and make sure their electrical system is running as efficiently as possible.
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This is naturally very disturbing. I' understand the crap eskom is at the moment and this may be a route out for them with the consumer being the victim. By having a 45% increase on elec. means increase on other stuff as well which means the consumer will have to cough up more money and the 45% becomes 65% total. I may have found a solution to it.
Instead of us paying 45% increase for the next 3 years why doesn't eskom with government come up with a "Special Tax" which would be deducted from your salary. This amount must be R100 per working person per month. When the target is reached this "special tax" should be dropped.
eg. 5 000 000 working people pay 100 rands per month = R500 000 000 per month and for a year X 12 = R 6 000 000 000.
Surely we can do this for 3 years and solve the problem. In this way both the consumer as well as Eskom will win. I may not be looking at the negative factors here but would appreciated your feedback. If this makes sense to you surely it would make CENTS to consumer. – Joe Mothilal
I totally agree with Joe, let the Government & Eskom come up with another way of sorting out THEIR mess and not killing us hard working people who have no money left @ the end of the month after paying +R1000.00 a month on electricity. Bring on a "special levy/tax" and go from there, not slap us with a 45% increase. How do they expect us to live? – Dalene van der Merwe
