Eskom unbundling won’t lead to job losses says Ramaphosa

By Antony Sguazzin

(Bloomberg) – South African President Cyril Ramaphosa said the government won’t cut jobs at the state power utility, Eskom Holdings SOC Ltd., as it divides the company into three separate businesses.

Ramaphosa announced the plan to divide the company into generation, transmission and distribution units in February, and there was an immediate backlash from labour unions who are concerned that the plan could lead to job losses. Eskom has 47,000 workers, a figure the World Bank has said is 66% too high, and debt in excess of R430bn ($30bn).

“What we will need to do going forward is to strengthen Eskom,” Ramaphosa said in an interview with Newzroom Afrika, a Johannesburg-based television station that started broadcasting today. “As the restructuring job unfolds, no we don’t see the loss of jobs.”

Also read: Why Ramaphosa’s unbundling plan for Eskom could work

Eskom has been described by Goldman Sachs Inc. as the biggest threat to the South African economy and isn’t generating sufficient cash to meet its maintenance costs, resulting in frequent power cuts so far this year. The government agreed to give it a record R69bn bailout in February.

The company won’t cut power to consumers this winter, Ramaphosa said. South Africa’s winter runs from June until August.