Triple whammy for Ermelo’s business community
Businesses in the Mpumalanga town of Ermelo are up in arms as they are feeling squeezed from all sides – with the likelihood that they could either relocate, close shop or shed jobs.
What these enterprises are experiencing is the triple problem of high electricity tariffs charged by the Msukaligwa Local Municipality, a water crisis, and a proposed road bypass that is a major threat to the survival of small and big businesses alike.
The town’s economy relies on services, mining, transport, tourism and government.
The electricity crisis started last year when businesses received astronomical bills after new meters were installed.
The Ermelo Business Association has since obtained a Northern Gauteng High Court interdict on behalf of 40 businesses that were slapped with bills for double or triple their normal charges.
Msukaligwa Municipality is, according to the interdict, barred from disconnecting power supplies until a resolution is found. Businesses must pay 30% of their bills in the meantime.
Ermelo Business Association director Janice de Jager said: “Ermelo has the most expensive electricity in the country. Four or five companies left the town in December because of this problem.”
A businessman, who declined to be identified because of pending litigation against Msukaligwa, said his bill used to be R27 000 a month, but it had escalated to between R90 000 and R134 000.
“The municipality must fix this problem because now I find myself owing R300 000,” he said.
The municipality insisted the charges were “correct and fair”, as they were approved by the National Electricity Regulator of SA. Municipality spokesperson Mandla Zwane said: “We did an investigation, which found that businesses were charged an average figure based on how much they used in previous months because our meter readers couldn’t always access their buildings. We put in a new system that charged them correctly and they started complaining.”
The SA National Roads Agency Limited (Sanral) wants to merge three national roads – the N17, N11 and N2 – that currently run through the town.
Sanral’s regional manager, Ismail Essa, said the three roads bring traffic not destined for Ermelo and cause congestion.
The Ermelo Business Association, however, wants things to remain as they are because travellers who stop in Ermelo inject about R21 million into the local economy.
Chairperson Athol Stark said if the bypass went ahead, 6 400 jobs would be lost in the first 12 months in filling stations and restaurants.
Essa said Sanral would consult all interested parties. The bypass will only be constructed in about three years. “We’re investigating and economic reasons will be looked at. Our objective is not to take business away.”
Since the town’s two dams ran dry towards the end of last year, businesses in the northern part and 26 000 households have been affected by water shortages. This crisis has been attributed largely to Msukaligwa’s failure to plan for population and business growth.