Eskom jobs will not be cut Ramaphosa
Utility overstaffed with 27,500 employees World Bank says workforce of 14,244 needed
Despite being overstaffed with as many as 27,500 employees, the government does not want retrenchments imposed on Eskom as part of the efforts to turn around the bankrupt power utility.
Speaking to parliament on Thursday, President Cyril Ramaphosa said references to cost cutting “should be understood not to mean retrenchments. The preferred strategy in reducing human resources costs will be to offer voluntary packages to staff.”
A 2016 World Bank study of utilities in Africa, which looked at the staffing data for 36 countries, found that Eskom needs a workforce of 14,244.
Other figures also indicate that the utility is overstaffed.
In 2007, for example, Eskom employed 32,674 people and sold 218,120GWh of power. The number of employees ballooned by nearly 50% to 48,628 in the 2018 financial year, while sales declined to 212,190GWh.
Ramaphosa’s comments came as Eskom imposed its fifth consecutive day of load shedding, as plant breakdowns and diesel supply issues meant the utility could not meet demand.
On Monday, the deeply indebted utility took 4,000MW off the grid for the first time, as 40% of its available generating fleet was offline. Load shedding is conducted rotationally as a measure of last resort to protect the power system from a total collapse or blackout.
After his announcement last week that Eskom would be split into three separate units generation, transmission and distribution was met with fierce opposition from labour unions and political parties, including the ANC, Ramaphosa assured stakeholders that there would
be engagement on plans for Eskom. “The fundamental principle that must underpin our response to the Eskom crisis is that it must be inclusive and consultative,” Ramaphosa told parliament on Thursday.
“We accept, as government, that we have not done enough to bring some of the key stakeholders, such as labour, on board and are determined to correct this,” he said.
“As government, we understand the fears of workers about job losses at Eskom and in associated industries. We undestand the concerns of lenders, investors and business owners.”
Trade unions argue that the proposed split will not solve Eskom’s governance and debt problems, and that it would lead to job losses.
Those in favour of the unbundling argue that it will create a more efficient system. A separate Eskom entity focusing on transmission, for example, will give it an incentive to procure electricity from the bestpriced producers, including independent power producers in the renewable energy space. This reduction in costs can then be passed on to the consumer.
Ramaphosa said ultimately the restructuring of Eskom was intended to ensure security of electricity supply for the country, which was critical for investment, economic growth and job creation.
“For those who have doubted the extent of the challenges [at Eskom], this week’s load shedding has provided a hugely damaging reality check.
“There is no single solution to the problems at Eskom neither restructuring, nor refinancing, nor cost cutting, nor tariff increases, nor better plant maintenance on their own will have the necessary effect. We need to pursue all of these measures and more, simultaneously, in a co-ordinated manner, and with purpose, to turn the utility around,” Ramaphosa said.
He also gave the strongest indication yet that the government would make sacrifices and reprioritise funds to bail out Eskom. The cash-strapped utility, which has debt of more than R400bn and is struggling to service it, is seen as the biggest risk to SA’s finances.
“It has become clear that Eskom does need to be assisted by the state to stabilise its finances because doing so, we will be stabilising the finances of our country,” Ramaphosa said.