South African Builders Union Rejects 10 Percent Wage Increase

South African construction workers rejected an offer of a 10 percent wage increase from employers and are holding out for 14 percent plus improved benefits, the National Union of Mineworkers said.

“The strike is still on,” NUM spokesman Lesiba Seshoka said in a phone interview today. The offer “only equals a 400 rand ($38.73) increase a month.”

About 90,000 construction workers have been on strike since Aug. 26 after wage talks deadlocked. Autoworkers and airline staff have also downed tools while motor industry employees and gold miners are threatening labor disruption in Africa’s biggest economy.

The building industry strike won’t be resolved in the near term as the gap between the union’s wage demands and the offer from employers is too wide, according to the country’s biggest builder.

“The parties are quite far apart,” Murray & Roberts Holdings Ltd. (MUR) Chief Executive Officer Henry Laas said in an interview in Johannesburg today. “It’s going to be difficult to close the gap in a short period of time.”

The strike has brought Murray & Roberts projects worth about 19 billion rand to a standstill, according to Financial Director Cobus Bester. Labor unrest cost the Johannesburg-based company about 350 million rand in the year through June, including 182 million rand at Eskom Holdings SOC Ltd.’s Medupi coal-fired plant.

The National Union of Mineworkers will meet with construction employers tomorrow for further wage talks, the union’s Seshoka said.

To contact the reporter on this story: Kamlesh Bhuckory in Johannesburg at kbhuckory@bloomberg.net

To contact the editor responsible for this story: Simon Thiel at sthiel1@bloomberg.net

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