If Eskom can spend billions of rand on contracts for coal and renewable energy independent power producers (REIPPs), then it can afford the 15% wage increase workers are demanding, the two biggest unions representing workers at the power utility said on Thursday.
In a joint media briefing, the National Union of Mineworkers (NUM) and the National Union of Metalworkers of SA (Numsa), said REIPPs and coal contracts, not wages, are the biggest cost drivers at Eskom.
The utility is buckling under a R480bn debt pile and depends on government bailouts to keep the economy functioning. Eskom issued a statement on Wednesday night saying its 1.5% wage increase offer is final.
The offer is conditional on unions agreeing to a proposed downward variation of worker benefits including overtime pay, travel allowances, and [employee] transfer costs. The NUM, Numsa and Solidarity have all rejected Eskom’s proposals.
In its annual financial statement for the year ended March 31 2020, Eskom said its staff complement of 44,772 earned R33bn in wages and benefits during the period under review. This works out to an average salary of R737,000 a year.
Eskom spokesperson Sikonathi Mantshantsha said of the entire workforce, just less than 30,000 fall under bargaining unit levels. Union leaders, however, disputed this, saying member workers earn between R175,000 and R477,300 a year.
“The goal is to peddle a false narrative that our members in the central bargaining forum are spoilt and unreasonable. The reality is that it is bloated coal and REIPPs costs collapsing Eskom, not workers’ wages,” said NUM deputy general secretary William Mabapa.
He said Eskom spent R28bn on IPPs in 2020, while their contribution to total energy generated amounted to a “mere 5%”. He said Eskom spent almost R72bn on coal in 2019 and R128bn on the REIPP programme in the pastlast financial year, while workers’ salaries had remained stagnant.
Mabapa said the Eskom wage bill accounted for R33bn in 2017 and R32.9bn in 2020. The NUM and Numsa leaders said their members’ demands of a 15% wage increase — Solidarity is demanding 9% — are justified. The unions’ demands are above the 3.2% inflation rate recorded in March and higher than the 4.3% average the SA Reserve Bank expects for 2021.
Mantshantsha said all Eskom contracts are awarded after a comprehensive and competitive process, with the most cost-effective tender being chosen. The department of mineral resources and energy is responsible for all procurement of independent power, he said.
“Eskom gets involved and accepts the contract once it gets the assurance that all the legal and regulatory requirements have been met in terms of procurement, including the grid code requirements, and the Public Finance Management Act requirements, and, of course, on assurance from the National Energy Regulator of SA (Nersa) on the cost pass-through,” said Mantshantsha.
Numsa general secretary Irvin Jim said: “We see that Eskom is negotiating in bad faith. If Eskom is willing to settle this round of wage negotiations, they will make a meaningful offer.
“For now, we are [still] negotiating. We are going to explore all avenues. If it comes to push, we might take legal action ... workers won’t perpetually fold their hands. This is a very sensitive issue; it’s about the economy.”
Jim said the union will now mobilise workers to protest and demonstrate in support of their demands. “At some point, we won’t be in control of what workers do in those demonstrations and protests. Very soon, we think the country will be running into a crisis if there is no movement [from Eskom] to make a meaningful offer,” he said.
“Workers are under siege in this country; we have had enough, we won’t tolerate this nonsense.”
The wage talks adjourned on Thursday and will resume on May 31.
Update: May 20 2021
This story has been updated with the wage talks adjournment.
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