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Eskom to Keep South Africa’s Lights on Even as Wage Talks Stall

July 15 (Bloomberg) -- Eskom Holdings SOC Ltd. will keep South Africa’s straining power system running even after wage talks between the state-owned power utility and the two biggest unions at its operations stalled.

Eskom, which provides more than 95 percent of the nation’s power, on July 12 referred the dispute with the National Union of Mineworkers and the National Union of Metalworkers of South Africa to the country’s Commission for Conciliation, Mediation and Arbitration, Hilary Joffe, the utility’s spokeswoman, said today by phone. If no agreement is reached, the matter will be set for compulsory arbitration and can’t result in a legal strike, she said.

“We are an essential service,” Joffe said.

The National Energy Regulator of South Africa on Feb. 28 allowed Eskom to raise prices by an average of 8 percent in each of the next five years, half the annual increases the company requested. The country’s power system is struggling to meet the needs of the continent’s biggest economy, with supply exceeding demand by razor-thin margins.

Eskom’s offer of a 5.6 percent increase in wages was a “spit in the face of workers by the filthy-rich Eskom executive,” the Numsa said today in an e-mailed statement. The union demanded a raise in the basic monthly minimum wage to 12,500 rand ($1,263) from about 9,500 rand, Numsa Chief Negotiator Steve Nhlapo said by phone

Numsa represents about 10,000 members of Eskom’s workforce. The NUM has membership of about 13,000 employees, Lesiba Seshoka, the union’s spokesman, said by phone. Eskom employs 43,473 workers, according to data compiled by Bloomberg.

To contact the reporter on this story: Andre Janse van Vuuren in Johannesburg at ajansevanvuu@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

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