Eskom’s 4.7% offer a good start — unions

Cash-strapped Eskom has offered its employees an inflation-targeted 4.7% wage increase for 2018 and inflationbased increases for the three years thereafter.

The power utility met with trade unions on Tuesday to resume wage negotiations following a week-long deadlock. Eskom initially offered workers no wage hike. This was disputed by trade unions and resulted in labour unrest at the company.

The unrest was blamed by Eskom for a roll-out of load shedding since last Thursday.

The National Union of Mineworkers, the National Union of Metalworkers of SA (Numsa) and Solidarity said they would take the company’s revised offer to their members for a mandate.

They said other demands such as housing allowance increases and payment of performance bonuses would remain unchanged.

The unions said they viewed the 4.7% proposal as an “opening offer” by Eskom, suggesting they expected it to increase.

Business Day understands the unions, which until now had

demanded 9% and 15% hikes, will be forming a united front to table uniform demands. While sources in the unions said an ideal increase would be 10%, they were likely to settle with a two-year wage offer giving workers 9% in the first year and 8% in 2019.

The four-year agreement proposed by Eskom was also bound to be shot down, the sources said.

Eskom is facing serious financial difficulties that could see it collapse.

On Tuesday, Eskom spokesman Khulu Phasiwe told Business Day that management would have to trim operational costs in order to avail the funds to foot the bill for the 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, and that is where the money will be coming from,” he said.

The government has given guarantees on Eskom debt of R350bn. The power utility said it would have to cut 30% of its 45,000-strong headcount to save costs.

The decline at Eskom was mainly linked to the capture of state-owned institutions. These became looting grounds for a network of politically connected individuals during former president Jacob Zuma’s administration. The most prominent beneficiaries were the Gupta family and its businesses.