Get more Mail & Guardian
Subscribe or Login

No retrenchments as Eskom forges ahead with unbundling

There will be no forced retrenchments as a result of Eskom’s unbundling, the state power utility’s chief executive André de Ruyter revealed on Wednesday.

During a briefing of parliament’s select committee on public enterprises and communications, De Ruyter said Eskom had taken this stance to protect jobs during the transition. 

Eskom’s unbundling into three separate entities — generation, transmission and distribution — will be concluded in December 2022, according to the department of public enterprises. The legal separation of the transmission company will be completed by the end of this year.

“We intend to avoid any section 189 retrenchments under the Labour Relations Act. I think that that is an indication of the seriousness with which we approach the interests of those colleagues of ours who belong to our three recognised unions,” De Ruyter said.

Eskom is currently locked in wage negotiations with unions. Last week, it tabled a 1.5% wage increase, which was rejected by unions. The National Union of Mineworkers and National Union of Metalworkers of South Africa are seeking a 15% increase.

Commenting on the wage talks, De Ruyter said: “As always, when these negotiations take place the tensions may become somewhat elevated. But at this time, we enjoy cordial and good relations with our unions. And we engage with them in an open and constructive manner.”

Eskom is confident it will be able to maintain the peace with organised labour going forward, he added.

Labour will be one of the key stakeholders that Eskom will have to manage as it embarks on its complicated unbundling process. It will also have to keep lenders happy. This is because they will need to be assured that Eskom will not default on its loans amid the unbundling process. 

Eskom’s presentation to parliament on Wednesday laid bare the complex number of bureaucratic hurdles that need to be conquered in the unbundling race. Policy and

legislation will need to be reformed, while licensing and tariffs will also have to be unbundled.

According to Eskom chief financial officer Calib Cassim, the legal unbundling will cost the power utility about R500-million. Most of this (42%) will go to changes to the entity’s information technology infrastructure. The rest will be split between lender engagement (26%) and commercial and land contract changes (22%).

De Ruyter assured members of parliament that Eskom’s management is doing everything it can to expedite the unbundling process. “We are forging ahead with as much speed as we can muster,” he said.

Earlier this week, Public Enterprises Minister Pravin Gordhan said in his budget vote speech that Eskom had achieved substantial progress towards restructuring. A total of 9 400 workers have been relinked with power stations and 6 773 have moved from corporate functions to divisions in preparation for their legal separation, Gordhan said.

De Ruyter said that though the deadline set for Eskom’s unbundling is ambitious, the power utility is currently on track to meet it. 

“The typical timelines for a restructuring of this magnitude in the private sector is a number of years. And without indulging in any self praise, I would venture to suggest that Eskom is so far moving very expeditiously in concluding the restructuring process.”

Subscribe to the M&G

Thanks for enjoying the Mail & Guardian, we’re proud of our 36 year history, throughout which we have delivered to readers the most important, unbiased stories in South Africa. Good journalism costs, though, and right from our very first edition we’ve relied on reader subscriptions to protect our independence.

Digital subscribers get access to all of our award-winning journalism, including premium features, as well as exclusive events, newsletters, webinars and the cryptic crossword. Click here to find out how to join them.

Sarah Smit
Sarah Smit
Sarah Smit is a general news reporter at the Mail & Guardian. She covers topics relating to labour, corruption and the law.

Related stories

WELCOME TO YOUR M&G

If you’re reading this, you clearly have great taste

If you haven’t already, you can subscribe to the Mail & Guardian for less than the cost of a cup of coffee a week, and get more great reads.

Already a subscriber? Sign in here

Advertising

Subscribers only

SANDF’s ‘dignity’ comes with a R200mn price tag

Find out about the SANDF’s new uniform, which is costing taxpayers close to R200-million, while mission-critical equipment is not maintained

Roshan Morar’s fingers in every pie, including KZN education and...

The controversial auditor’s firm seconded staff to run the education department’s finance offices for more than 15 years. What’s more, former KZN education director general Cassius Lubisi is the audit firm’s new chair

More top stories

Ice skating champion shows off the Cape Flats talent at...

A young ice-skating champion has beaten the odds and brought home a national gold medal

Study finds too much salt can damage immune cell function

The study investigated how sodium intake affects human cells by giving participants 6g of salt in tablet form each day for 14 days, while they continued with their normal diets.

New plan to tackle marine pollution

The environment department’s Source-to-Sea initiative will create 1 600 work opportunities

Gigaba insists he faced sinister threat, slams court ruling on...

The former cabinet minister told the Zondo commission he cannot see how the court concluded there was no evidence of a plot to kill him
Advertising

press releases

Loading latest Press Releases…
×