South Africa Blackouts Deepen as Strike Halts Power Project

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South Africa’s state electricity utility broadened power cuts on Wednesday in the longest stretch of rolling blackouts since February as a strike at the new Medupi plant compounded shutdowns at other units.

Eskom Holdings SOC Ltd. said it would reduce supply to the grid by as much as 4,000 megawatts from 4 p.m. after cutting 2,000 megawatts in the morning. It’s the fourth straight day of scheduled blackouts after a 4,000-megawatt reduction on Tuesday.

The decision to cut more power follows “a further shortage of generation capacity as additional units have had to be taken out of service for unplanned maintenance caused by technical faults,” the Johannesburg-based utility said in a statement.

The cuts force businesses to close at peak times and snarl traffic across cities in Africa’s most-industrialized economy. The shortages, coinciding with the onset of autumn, have been exacerbated by labor unrest among construction workers at the Medupi coal-fired plant, whose first unit was connected to the grid earlier this year.

Members of the National Union of Metalworkers of South Africa have rejected an offer by Eskom to reinstate 1,700 laborers who held an unauthorized strike at Medupi, saying the utility didn’t address all of their demands, according to spokesman Castro Ngobese.

“Our members are not going back to work,” he said by phone.

Medupi Demands

Workers want their completion bonus of 10,000 rand ($826) and an end to job cuts at the site, which Eskom has said are inevitable, according to Ngobese.

The first of Medupi’s six units is due to reach full capacity of 800 megawatts by June. The entire plant will ultimately increase South Africa’s generation capacity by 4,764 megawatts.

“Reports indicate this morning has seen high levels of violence and intimidation in town,” Ed Jardim, a spokesman for contractor Murray & Roberts Holdings Ltd., said in an e-mail. “We have decided to not return to work this week until the levels of violence and intimidation diminish completely.”

There are about 1,996 people working at Medupi at present, according to Eskom, which estimated about 14,000 laborers on site last month. “Neither Eskom nor the contractors has been informed by NUMSA that they are not accepting the conditions as set out,” it said in an e-mail.

Minister Concern

Public Enterprises Minister Lynne Brown said she’s “very concerned” about the action at Medupi, which comes as Eskom carries out long-overdue maintenance on other aging power stations. She warned that scheduled cuts, known as load-shedding, are set to continue for two years.

“I wish, on behalf of the government, to apologize for the inconvenience anyone has suffered,” she said. “We understand the consequences of load-shedding on business activity, employment and productivity and wish to assure the public, consumers and all players in our economy that we are working tirelessly to ensure that we have adequate electricity supply.”

Eskom is struggling to plug a 225 billion-rand ($19 billion) funding gap required to build new plants and maintain existing generators. Supply to 20 municipalities that are home to about 3.8 million people may be cut from June because the districts owe the power producer 3.68 billion rand, the company said April 10.

The utility has started the process of selling assets to tackle its funding shortfall, while other measures are also being studied, Matsieti Mokholo, acting director-general of the Department of Public Enterprises, told reporters.

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