Malusi Gigaba says the stakes are too high to have persistent labour problems.
Public Enterprises Minister Malusi Gigaba has called for a pact between labour and government to ensure that labour unrest does not derail the country's plans to roll out infrastructure.
He also condemned the violence that has characterised many recent labour protests and called on union leaders to "show leadership" in containing the bloodshed and growing inter-union rivalry. He was speaking to the Mail & Guardian after his budget vote speech this week in Parliament.
In recent months, labour strife has threatened the delivery deadlines of the two major power stations, Medupi and Kusile. Work was halted at Kusile last week, with workers protesting about aspects of a project labour agreement, but they have returned to work. Medupi's project labour agreement is being renegotiated with the target for completion set at the end of the month.
Medupi and Kusile are the bellwethers for government ambitions to spend an estimated R4-trillion on infrastructure. They are among the first of 18 strategic integrated projects being managed by the presidential infrastructure co-ordinating commission.
Organised labour
Gigaba said that, on major infrastructure projects like Medupi and Kusile, labour relations had been managed on a project-by-project basis. But a broader agreement had to be reached at the presidential infrastructure co-ordinating commission level between government leaders and unions.
"Organised labour has a right to look after the interests of their members but we need a pact around the implementation of the infrastructure roll-out that's going to recognise the importance of this programme, and the risk of failure, of cost overruns and delays, particularly as a result of labour unrest," he said.
Unions had to develop "a different understanding" of the infrastructure programme, because it was "of national interest". "We all benefit from its successful implementation," he said.
Eskom's experiences at Medupi could be pivotal to the presidential infrastructure co-ordinating commission. The power utility was in the process of recording these experiences, including the review process of the project labour agreement, which could provide useful insight when working to prevent similar problems on future projects.
Gigaba condemned the violence seen during some protests, including the vandalism and destruction of property that took place at Medupi during strikes earlier this year. An element of inter-union rivalry had also surfaced at the site. Union leaders needed to sit down together to set basic parameters to manage this and amicable ways had to be found to resolve disputes, he said.
Concerns of renewed violence
Gigaba's remarks come as concerns of renewed violence emerged in the mining sector at Marikana this week. A wildcat strike took place at Lonmin following the killing of a member of the Association of Mineworkers and Construction Union (Amcu).
Unlike Eskom which is experiencing labour woes, Transnet announced on Wednesday that it had reached a two-year wage settlement with its unions for the first time in the company's history. Transnet has embarked on a R300-billion strategy to meet demand over the next seven years and aims to increase rail capacity. It is another focal point of the government's infrastructure investment plans. But the major challenge of financing this remains.
Eskom in particular faces funding challenges after the national energy regulator determined that the utility could not increase tariffs by the 16% the company requested, instead granting it an increase of half that.
In his budget speech, Gigaba said that, given the major role played by state-owned companies in the acceleration of the programme, his department had taken a number of initiatives to enhance its ability to design, fund and manage megaprojects.
It included the capacity the department to work with state-owned enterprises to draw on "new sources of equity finance" for the infrastructure programme.
Task team
"A task team has already been established with Transnet and the Chamber of Mines to explore the funding of specific projects," he said in the speech. These talks were in their infancy but were aimed at trying to ensure private-sector participation, particularly the mining sector, in infrastructure development. "At the end of the day, the bulk of our rail capacity is aimed at supporting their business," he said.
But there have been complaints from both sides of the fence, with the private sector raising concerns that, aside from existing projects, the state has made little headway on infrastructure spending. On the other hand, the state has complained that private companies have been unwilling to use their large corporate cash piles to invest in the country.
Gigaba said his department wanted to use its influence over pension funds related to state-owned enterprises to provide additional leverage. This included using the pension funds to put pressure on private sector companies that were not investing proactively in the economy.
"We want them to put pressure on the companies in which they've invested to actually invest in the economy," he said.