Eskom drags Nersa to court as strike looms
• Utility wants regulator’s 5% price increase reviewed • Unions threaten a total shutdown
Eskom, which is fighting for survival, has dragged its regulator to court over its tariff decision and is toughing it out against employees with a wage freeze, despite the growing prospect of a strike.
At present it costs the company more to produce electricity than the National Energy Regulator of SA (Nersa) allows it to recoup from tariffs. The company also sits with a huge debt burden of R350bn, increasing by about R70bn a year.
Eskom’s new management, headed by CEO Phakamani Hadebe, must cut costs, increase revenue and restructure debt if the company is to be sustainable into the future.
But steps to do so — such as its wage freeze — have angered trade unions, which are set to embark on an illegal strike, with a meeting between unions to iron out details scheduled for Monday. Eskom workers are classified as essential services and cannot legally strike.
Eskom will for the first time go to court to request a review of the 5% price increase it was granted earlier in 2018. On Thursday it filed papers at the High Court in Johannesburg. It had applied to hike tariffs 19.9%.
DIFFERENT CONCLUSION
Eskom spokesman Khulu Phasiwe said on Sunday that “we do believe that Nersa would come to a different conclusion if they were to have another look at our application.
“We are not disputing their processes but we would like Nersa to review their decision so that we can get what we believe to be a fair reflection of our cost structure.”
While a court cannot amend the regulator’s decision, it can order the regulator to review its own decision if it believes a
material error has been committed in the Nersa process.
A third round of wage talks ended late on Thursday in deadlock, with the National Union of Metalworkers SA and the National Union of Mineworkers walking out, vowing a “total shutdown”.
The majority union at Eskom, the NUM, said the power utility was using the essential services provision as an excuse.
“We are going on strike; unions will be meeting on Monday to finalise the details,” a spokesman said.
Numsa said Eskom had treated labour in a “hostile way”, which was unprecedented. The union is affiliated to the South African Federation of Trade Unions. Saftu general secretary Zwelinzima Vavi said on Sunday a strike was a certainty.
“We will switch it off and we will not take responsibility,” Vavi said.
Solidarity deputy general secretary Deon Reyneke said the union would not encourage its members to go on strike as this would be illegal.
Reyneke said Solidarity would, however, participate in the meeting on Monday with the other unions at Eskom.
Phasiwe said he was aware of plans for a strike but said existing legislation prohibited workers from doing so. “We don’t expect anyone to go on strike as we know this will be illegal,” he said.
Cosatu president Sdumo Dlamini has called on Public Enterprises Minister Pravin Gordhan to intervene.
Gordhan confirmed on Sunday that his department agreed to the meeting. He said he was also arranging to meet other unions. “It is important to reach a common understanding of the current environment and the constraints and possibilities,” Gordhan said. All state-owned enterprises “and labour unions need to work together to overcome the damage that state capture and corruption has done to our institutions”.
In its attempts to stop corruption, Eskom has put its head of procurement, Jay Pillay, on precautionary suspension, while Ayanda Nteta, head of primary energy (coal), is also going through a disciplinary process on allegations of irregularities that may involve corruption. Nteta’s name appears regularly in the leaked e-mails showing evidence of the Gupta family’s corrupt capture of the utility, which has cost it billions.