Eskom Can't Guarantee South African Power Amid Wage Protests

(Bloomberg) -- South Africa’s state-owned utility said security of power supply could be threatened as workers protest Eskom Holdings SOC Ltd.’s insistence that it can’t offer pay increases.

While all power plants are running, nine have been affected by the labor action and some aren’t receiving coal, Eskom told reporters on Wednesday at the utility’s headquarters in Johannesburg.

The utility “can’t guarantee” that security of supply isn’t under threat, said Thava Govender, Eskom group executive for generation. “Some of the stations are battling and they’re running at lower load.”

The supplier of most of South Africa’s electricity is determined to “keep the lights on,” said Chief Executive Officer Phakamani Hadebe, adding that Eskom is implementing contingency plans and will get court orders to stop the protests if needed. Wage talks between cash-strapped Eskom and unions broke down last week. While the labor organizations have said they’re planning a protest march on Thursday, legally workers are not permitted to strike because the power producer is considered to provide an essential service.

Police surrounded five of Eskom’s stations earlier Wednesday when protesters tried to block other employees from arriving for night shifts.

“We are waiting for information from our regions regarding events as they unfold in Mpumalanga,” Phakamile Hlubi, a spokeswoman for the National Union of Metalworkers of South Africa, said in a text message response, referring to the province where Eskom’s key coal plants are located. “The official day of action is the march, which is happening at Megawatt Park tomorrow,” she said, referring to Eskom’s head office.

The utility is taking measures to improve its finances as demand has weakened since rolling blackouts in 2015 curbed South Africa’s economic growth. In addition to scrutinizing its business model, Eskom is also reining in costs. The board was overhauled early this year.

To contact the reporters on this story: Ntando Thukwana in Johannesburg at nthukwana@bloomberg.net;Odwa Mjo in Johannesburg at omjo@bloomberg.net;Paul Burkhardt in Johannesburg at pburkhardt@bloomberg.net

To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net, Dylan Griffiths, Amanda Jordan

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