Eskom Says Some Workers May Walk Out Over Pay From Wednesday

(Bloomberg) -- South Africa’s Eskom Holdings SOC Ltd., which generates more than half of the electricity consumed on the continent, said some workers at power plants may not report for duty as early as Wednesday after the utility refused to increase pay.

“People are saying between tomorrow and Thursday there’s going to be pickets leading into some kind of a strike,” Khulu Phasiwe, a spokesman for Eskom, said by phone. “We all know that this will be an illegal industrial action.”

The National Union of Mineworkers and National Union of Metalworkers of South Africa said at a joint press conference Tuesday that they would follow a legal path over the breakdown in wage negotiations last week. The unions said they’re planning a protest march on Thursday after cash-strapped Eskom insisted it can’t offer any pay increases. Because Eskom is considered to provide an essential service, workers are legally not permitted to strike.

The utility is taking measures to improve its finances as demand has lagged since rolling blackouts in 2015 curbed the country’s economic growth. In addition to scrutinizing its business model, it’s reining in costs.

Eskom has put contingency measures in place to maintain power supply in light of potential protest action. The utility also “has a significant buffer of generating capacity currently in place for the unlikely event of one or two stations shutting down completely,” Darias Jonker, an Africa analyst at risk-advisory firm Eurasia Group, said in a note to clients.

“Tomorrow there will probably be some people who won’t be able to come to work,” Phasiwe said. “It could be because they are active participants or maybe people will be intimidated.”

To contact the reporter on this story: Paul Burkhardt in Johannesburg at pburkhardt@bloomberg.net

To contact the editors responsible for this story: James Herron at jherron9@bloomberg.net, Dylan Griffiths, Rakteem Katakey

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