The National Union of Mineworkers (NUM) has confirmed lodging two disputes over Eskom’s unbundling, denouncing the move as a neoliberal agenda designed to pave the way for privatisation of the power utility.
Eskom, which turned a profit for the first time since 2017, confirmed in its integrated report released last week that organised labour had declared two disputes relating to the separation of the National Transmission Company of SA (NTCSA) and the intended separation of the National Electricity Distribution Company of SA (NEDCSA).
This, it said, was creating “challenges in the consultation process until the arbitration is concluded”, adding it could cause further delays to the timelines.
“NEDCSA was registered to house the distribution business. Its separation has been similarly delayed by external dependencies, including the delays which affected the NTCSA separation,” Eskom said.
Eskom is being unbundled into three distinct entities responsible for generation, transmission and distribution, as part of a major restructuring drive intended to improve efficiency in the electricity sector and open the door for greater investment.
Its unbundling has achieved functional separation and the establishment of the NTCSA as a subsidiary, but full legal and operational independence for all three entities is still in progress.
While transmission is advanced, significant work, including resolving municipal debt and securing regulatory approvals, is needed for distribution and the broader creation of a competitive energy market.
Speaking to Business Day, NUM energy sector co-ordinator Khangela Baloyi said the Cosatu affiliate lodged the disputes with Tokiso Dispute Settlement, a private and independent dispute resolution company in Sandton.
Labour not consulted
“It’s us who lodged the disputes. When the first leg of the transmission unbundling took effect from July 2024, we declared a dispute because Eskom implemented that decision without consulting labour.”
Baloyi said that earlier this year Eskom had made an “attempt” to consult before proceeding with the distribution unbundling phase. “We again decided to lodge a dispute about three months ago because it seems to us that Eskom’s unbundling programme is being used as a condition for the power utility to continue receiving government bailouts.”
Eskom, which registered a profit before tax of R24bn, received a R254bn relief package from the Treasury in 2023 in a programme that enjoined local government to pay their dues to Eskom. Municipal arrears rose to R95bn from R75bn, with the state-owned company estimating the debt will grow to over R300bn by 2030 if no sustainable solution is found.
“The complexity and magnitude of the municipal arrear debt challenge, which affects NEDCSA’s financial sustainability as well as that of the group as a whole, is impacting NEDCSA’s lender engagement process.
We know what happened to Transnet. It was unbundled. Where is Transnet today? Very soon private trains are going to operate on our public railway system.
— Khangela Baloyi
NUM energy sector co-ordinator
“The distribution management board has recommended that the matter be escalated to intergovernmental structures and factored into revised project timelines,” Eskom said in the report.
Baloyi said: “The dispute resolution process is going on, albeit very slowly. The NUM is clear: the unbundling agenda is a neoliberal programme which seeks to privatise Eskom.
“We know what happened to Transnet. It was unbundled. Where is Transnet today? Very soon private trains are going to operate on our public railway system.”
National Council of Trade Unions (Nactu) general secretary Narius Moloto said the union federation did not understand the basis of the NUM’s objections.
“We thought such reforms are necessary for Eskom to achieve some level of efficiency. We are happy that Eskom has achieved a profitable position for the first time in a long time and hope it sustains such performance, which must lead to [electricity] price reductions,” Moloto said.
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