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Eskom unbundling will result in more debt, job losses - NUM

Feb 14 2019 14:04
Sibongile Khumalo

The unbundling of Eskom announced by President Cyril Ramaphosa in his State of the Nation Address will be an expensive exercise that pushes the state-owned power utility into further debt, the National Union of Mineworkers said on Thursday as it reiterated its stance against splitting of the group.

NUM is one of thee recognised unions at the debt-laden power utility, together with National Union of Metalworkers of South Africa (Numsa) and Solidarity. 

The union added that the plan announced by Ramaphosa will not solve the financial problems faced by Eskom, which include a R435bn debt.

"From where we stand, we are against the unbundling. History has taught us that the splitting of companies often comes with job losses," said NUM General Secretary David Sipunzi in Johannebsurg. 

Sipunzi said the restructuring of Transnet over a decade ago demonstrated how the restructuring of state-owned entities impacted jobs and future employment.

The NUM, which represents 15 000 members at Eskom, said it will meet the Public Entreprises Minister Pravin Gordhan on Monday to discuss challenges faced by company.

Ramaphosa announced that Eskom would be split into three separate entities – generation, transmission and distribution – which would still fall under the company Eskom Holdings.

The union believes that the three entities would further contribute to the draining of finances as each of the new companies would require their own set of management teams, and argued that it remain a remain a "vertically integrated utility". 

On Wednesday, Parliament's portfolio committee heard that Eskom would be technically insolvent, and could cease to exist by April 2019 if it continues on the current trajectory. The department of public enterprises later updated the presentation to the committee it had uploaded onto its website, changing "technically insolvent" to the less severe "facing liquidity crisis". 

The department did not immediately reply to a request for more information. 

Gordhan, meanwhile, told lawmakers that the planned unbundling does not mean that the utility will be privatised. The company has forecast a loss of R19.7bn for 2019/20.

Fire the board

Eskom, which generates most of the country's electricity is currently implementing rolling power cuts, which began on Sunday.

The outages have been blamed on the failure or 'tripping' of generating units at various power plants, compounded by maintenance backlogs and other problems. 

The NUM on Thursday voiced its lack of faith in the Eskom board which was appointed in January 2018, saying it has failed to bring stability to the group or show meaningful results of the turnaround strategy.

"Today, the board has dismally failed to deliver on its mandate," said NUM.

The union said Ramaphosa's appointment of an Eskom energy task team was a sign of his lack of confidence in the board, which is lead by Jabu Mabuza.

"We call on the president to simply disband this incompetent board."

The Federation of South African Trade Unions criticised the plan to split Eskom. Its members on Wednesday took to the streets across the country to protest against the strategy, as well as against job losses.

The unions claim they were not consulted over the decision.

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