South Africa’s Eskom and unions to start key wage talks next week

PUBLISHED: Fri, 30 Apr 2021 10:13:34 GMT
Share

JOHANNESBURG, April 30 (Reuters) – South African state utility Eskom will start a fresh round of wage negotiations with trade unions next week, it said on Friday, warning any disputes could impact its ability to supply electricity.

Eskom struggles to power Africa’s most industrialised nation because of repeated faults at its ailing coal-fired power stations and is choking under more than 460 billion rand ($32 billion) of debt.

The last round of negotiations in 2018 led to power outages after workers reacted angrily to Eskom’s initial refusal to hike wages and protested. The company later offered above-inflation increases, and a three-year agreement was signed.

Eskom has not disclosed its position ahead of the talks, but said in a statement it hoped to reach an agreement that was financially sustainable and in the best interests of its employees and the public.

If the talks from May 4 to June 3 turn fraught, there may be “a negative impact on our infrastructure and operations, which may compromise our ability to supply electricity,” it added.

Eskom will be negotiating with the National Union of Mineworkers (NUM), the National Union of Metalworkers of South Africa (NUMSA) and Solidarity.

The NUM is demanding a salary increase of 15% in the 2021/22 financial year but would also consider a multi-year agreement, NUMSA wants a one-year 15% salary increase and Solidarity is seeking a 9.5% annual increase over multiple years. Inflation is currently around 3%.

“The talks starting next week will determine the duration of the settlement,” Eskom’s spokesman told Reuters.

The 2018 wage agreement was for salary increases of 7.5% in 2018/19, 7% in 2019/20 and 7% in 2020/21, and exacerbated the dire state of Eskom’s finances. The utility expects to make a loss of about 22 billion rand in the year to the end of March 2021.

Unions argue Eskom’s woes are chiefly linked to corruption and mismanagement over many years, and that workers should not lose out as a result.

($1 = 14.3863 rand) (Reporting by Alexander Winning. Editing by Mark Potter)

(c) Copyright Thomson Reuters 2021. Click For Restrictions – https://agency.reuters.com/en/copyright.html

Sign Up for Our Newsletter Daily Update
Get the best of CNBC Africa sent straight to your inbox with breaking business news, insights and updates from experts across the continent.
Get this delivered to your inbox, and more info about about our products and services. By signing up for newsletters, you are agreeing to our Terms of Use and Privacy Policy.