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Eskom and unions face off over wages as load shedding kicks in again

CEO Andre de Ruyter is sticking to his guns on wage hikes.

CEO Andre de Ruyter is sticking to his guns on wage hikes.

Published May 17, 2022

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POWER utility Eskom, which upped load shedding to stage 4 yesterday, is now locked in a wage dispute with organised labour, which CEO Andre de Ruyter dismissed out of hand yesterday, insisting on a 1.5 percent handshake.

At yesterday's briefing, De Ruyter said the utility would not be entertaining the demands of organised labour, which he said was being unethically broadcast in the media, saying that the 2018 agreements for an 8 percent increase for workers still stood.

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"We cannot respond by giving double digit increases, we have an agreement that gave employees 8 percent compounding over  three years and last year we gave a 1.5 percent increase at the bargaining council. Given the position we are in, we cannot give more than we have already," De Ruyter said.

National Union of Metalworkers of South Africa (Numsa) said yesterday  that Eskom had not responded to a wage demand of 15 percent. Numsa also wants a housing allowance increase of R1600 for its members at Eskom.

Labour said last year Nersa had allocated a minimum of 5.6 percent increase for workers’ wages, but Eskom had imposed a 1.5 percent increase, while it was also attempting to impose a reduction in benefits as well because it claimed it could not afford the increase.

“Eskom management has no justification for claiming they cannot afford our demands. Workers have not received a meaningful increase in two years and morale is very low, but executives continue to waste money paying for inflated contracts. Given these facts, Eskom management has clearly demonstrated that it can afford workers’ demands and so, we will not accept anything less than a double digit increase,” Phakamile Hlubi-Majola said.

Numsa also was also critical of De Ruyter, who was undermining the CBF by communicating directly with workers.

Hlubi-Majola said, "We also wish to deal with the false narrative that Eskom does not have money to meet workers’ wage demands. We reject this with the contempt it deserves. We made it clear at CBF (central bargaining forum) that Eskom cannot claim poverty while they are spending billions on exorbitant primary energy costs.“

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Eskom reportedly told Nedlac that it predicted it would spend a minimum of R20.9 billion on diesel for the current financial year in order to fuel the open cycle gas turbines. This was on top of the R12.6bn spent on open cycle gas turbines for 2021/2022 financial year, she said.

The National Energy Regulator of SA (Nersa) had approved only R3.5bn spent on diesel, but Eskom had exceeded this,“ Hlubi-Majola said.

Eskom has admitted to a high diesel fuel cost, which translates to 14 litres per second per open cycle gas turbine (OCGT), making for the use of a million litres of diesel per hour at R22 a pop amounting to about R14 million per hour of OCTG.

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Numsa said the matter was currently before the Commission for Conciliation, Mediation and Arbitration and was being dealt with through arbitration.

Eskom spokesperson Sikonathi Mantshantsha said at the briefing, "We have to note that Eskom gets its diesel from major suppliers and, therefore, there are no middlemen. We are spending close to the margins as possible.“

De Ruyter yesterday said the utility battled on all fronts to deliver power to the economy, admitting to failures in the generation aspect.

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This as Phillip Dukashe last week unexpectedly resigned as Eskom’s group executive for generation after 29 years with the utility.

“We are quite disappointed in the performance of our generation division, we had better expectations, we are still going to try and improve performance,” De Ruyter said.

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