Photographer: Waldo Swiegers/Bloomberg
markets

Blackout Threat Rises With Worker Protests Stifling Sout Africa Power Supply

Updated on
  • Eskom has done ‘everything possible’ to keep system running
  • Workers are protesting decision not to give pay increases

South Africa’s state-owned power utility Eskom Holdings SOC Ltd. said it will start rolling blackouts for the first time since 2015 as protesting workers blockade plant entrances and disrupt distribution networks.

“Acts of intimidation and sabotage have resulted in Eskom being unable to ensure uninterrupted power supply,” Khulu Phasiwe, Eskom’s spokesman, said via his Twitter account on Thursday. Blackouts would occur for about two hours until 8 p.m in Johannesburg, he said.

Eskom, which generates almost all of the nation’s electricity, has stopped all road deliveries of coal after demonstrators blockaded roads, attacked staff and damaged infrastructure, it said in a statement Thursday. Wage talks broke down last week after Eskom, which is working to improve its financial situation under a new board and chief executive officer, insisted it can’t afford pay increases.

The company called on consumers to cut usage to reduce pressure on the “constrained” system. It is working with stakeholders to keep power stations operating, it said in an emailed statement.

“As a last resort, Eskom will implement its power system contingencies, including controlled load shedding, to avoid a blackout/shutdown of the national power system,” the company said.

The rand weakened 0.4 percent to 13.3643 per dollar by 6:15 p.m. in Johannesburg after gaining as much as 1.6 percent earlier.

Essential Service

Legally, workers aren’t permitted to strike because the power producer is considered to provide an essential service. The company will get court orders to stop the protests if needed, CEO Phakamani Hadebe said Wednesday.

The protests come as the utility is faced with the seasonal increase in demand for electricity over the southern hemisphere winter. The company has also battled coal shortages, allegations of corruption and mismanagement, and struggled to raise the funding it needed earlier this year. A repeat of outages from three years ago would undermine signs of recovery in Africa’s most-industrialized economy.

Read: Leaders Tested at South Africa’s Eskom With Trouble Ahead

Power supply to the company’s Johannesburg head office was “mysteriously” cut off on Thursday morning, Phasiwe said earlier on Twitter. The problem, which affected the surrounding area, has been resolved, he said by phone.

Unions scheduled a picket at the office on Thursday, and more than 100 buses delivered thousands of people to the site by around lunchtime, according to security personnel.

Eskom has seven days to respond to the unions’ demands, National Union of Mineworkers spokesman Livhuwani Mammburu said by phone. The dispute has been referred to mediation under the Commission for Conciliation, Mediation and Arbitration and NUM is prepared to “give negotiations a chance,” he said.

Eskom was meeting the country’s generation needs of just more than 30,000 megawatts, Phasiwe said earlier.

“Later in the evening when people go back home and they start using geysers and heaters and other things, usually it rises to about 32,000 megawatts,” he said. “So we’ll see as to how we manage it.”

    Before it's here, it's on the Bloomberg Terminal. LEARN MORE