Trade unions at Eskom tabled a long list of demands on Wednesday that includes a 9% wage hike for 2018, almost twice what the utility offered.
The National Union of Mineworkers, the National Union of Metalworkers of SA and Solidarity consolidated their demands during a marathon meeting at which Eskom’s 4.7% offer was rejected.
They are also seeking increases of 8.6% and 8.5% for the following two years.
Negotiations resumed this week after a deadlock was broken by Public Enterprises Minister Pravin Gordhan, who said on Friday that Eskom would review its 0% offer.
The unions also want a R1,000 housing allowance in 2018 and performance bonuses for 2017-18.
The demands come as Eskom battles for survival with debts of about R350bn, stagnant sales and tariffs that do not reflect what it costs the company to produce electricity.
Unless the power utility’s debt is dramatically restructured and operational costs slashed, it may not survive. For credit ratings agencies, Eskom remains at the top of the list of risks to the South African market.
Financial crisis
A statement released by the three unions on Wednesday said they had made a proposal that would rescue Eskom from its financial crisis while also dealing with their demands.
NUM and Numsa have reduced their initial 15% demand, while Solidarity had demanded 9%.
The unions gave no further detail on how their wage proposal could relieve Eskom’s financial crisis.
Other items on their list included the banning of labour brokers and that permanent contractors be insourced or made permanent employees.
On Tuesday, Eskom spokesman Khulu Phasiwe said that Eskom would have to trim operational costs in order to avail the funds to foot the bill for the wage increases.
"The money is there but scheduled for other things that we need for our daily operations; we are going to have to trim some of the operational expenses," he said.
Speaking at the Vision 2030 Summit at Emperor’s Palace on Wednesday S&P Global Ratings MD for Africa Konrad Reuss said that Eskom’s liquidity crisis was far from solved.
"We didn’t see sufficient government support for Eskom in the context of persistent liquidity pressures," Reuss said.
"We have to see government support materialising in a way that the liquidity crisis is being dealt with in a sustainable way. Negative cash flow and a liquidity crisis are dragging Eskom down," he said.
Concern remained that the debt trajectory in state-owned enterprises was unsustainable, Reuss said.
S&P downgraded Eskom earlier in 2018 further into junk status at CCC+ with a negative outlook. Reuss said this implied an almost guaranteed default.
He said that getting SOEs back on track would help to rebuild credibility and confidence in SA to attract investment and put the country on a sustainable growth trajectory.
Speaking at the same event on the state of SOEs, Treasury deputy director-general of asset and liability management Anthony Julies said: "There have been practices within these entities that have led to this erosion and the unsustainability of their models. This has led to liquidity problems and credit rating downgrades."
SA was now in a rebuilding phase, Julies said in an interview on Wednesday.
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