Warning: Expect blackouts as workers sabotage Zupta-hammered Eskom

EDINBURGH — The South African economy has been dealt serious blows by Eskom workers, who are sabotaging systems in a protest over pay. Eskom is a state entity that has been raided by Zupta associates involved in the plundering of state assets. Although it generates almost all of the country’s electricity, Eskom is a significant loss-maker. But its workers want big bonuses. That’s hardly surprising when you consider that they have watched the likes of Brian Molefe divert funds to his Gupta and Zuma associates. Molefe is the former Eskom CEO who denied visiting the Gupta family at their Saxonwold residence, even though phone records handed to the former public protector, Thuli Madonsela, indicated he was in the vicinity. Molefe was the laughing stock of South Africa for this fib, sparking jokes about the Saxonwold shebeen. Molefe is a key link in allegations that Eskom may have fraudulently given money to a Gupta-linked company to enable it to buy a coal mine. Molefe has also vigorously promoted the benefits of a nuclear build programme with Russia and which many believe was going to bankrupt the country while its beneficiaries reap the benefits of tapping into state contracts. – Jackie Cameron

By Paul Burkhardt

(Bloomberg) – South Africa faces a high risk of rolling blackouts after protesting workers blocked access to facilities and sabotaged systems, the state power utility warned.

Loss-making Eskom Holdings SOC Ltd., which loses money despite generating more than 90 percent of the country’s electricity, has been flagged by ratings companies as a key risk to South Africa’s economy as it grapples with issues from insipid demand to unsustainable debt. Workers are protesting Eskom’s refusal to pay performance bonuses.

An Eskom branded flag, right, flies alongside the South African national flag outside the company’s headquarters. Photographer: Waldo Swiegers/Bloomberg

“We’ve so far lost quite a number of units” which will result in power outages during peak hours on Tuesday if they aren’t returned to service, spokesman Khulu Phasiwe said by phone. Many of Eskom’s offices have been emptied due to intimidation and threats, he said.

Police were called in Monday after at least four units were affected at sites including Koeberg, the nation’s only nuclear plant, according to Eskom. At the Matla plant, a conveyor belt typically used to feed coal, was cut, in what management suspected could be an act of sabotage. Coal trucking at some plants also stopped, creating shortages of the fuel, the utility said.

The National Union of Mineworkers, which represents the most employees of any labor group at Eskom, “participated in a peaceful protest” over Eskom’s refusal to pay a bonus and wasn’t responsible for sabotage, spokesman Livhuwani Mammburu said by phone.

Eskom offered to raise wages by as much as 7.5 percent annually after it was forced to introduce rolling blackouts last month when protesters blocked roads and attacked staff as wage talks broke down.

Still, the utility has stood firm on its refusal to pay bonuses, after reporting an annual loss of R2.3 billion ($174 million) last week. That stance amounts to an “act of war,” according to NUM. Legally, workers aren’t permitted to strike because the power producer is deemed to provide an essential service.

Management hasn’t determined whether the outage at the country’s only nuclear plant – a technical fault in one of the units that’s not in a sensitive area – is connected to the protest, Phasiwe said. Still, ramping up a nuclear unit can take days and a coal-powered equivalent up to 8 hours, he said.

Eskom said last week that no bonus provision was raised as the utility missed its net profit target of 500 million rand. It also said financial constraints require a reduction in employee-benefit costs to keep the business sustainable.

Eskom and the unions will meet again on Aug. 3, the company said.