South Africa introducing private energy producers! Cost-cutting will increase the price of electricity says Saftu

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Saftu members during a march against privatisation of Eskom

THE SOUTH African Federation of Trade Unions (Saftu) spokesperson Trevor Shaku came out guns blazing and has charged that the Eskom energy production crisis was engineered in order to create opportunities for looting and restructuring, which were allegedly contemplated by Public Enterprise Minister Pravin Gordhan.

‘Just like South Africa Airways (SAA), Eskom’s consciously engineered woes are a premise for privatisation.
‘The eventual restructuring spells two things: job losses and higher prices. Restructuring and retrenchments have become synonymous, and this is because labour is a disposable factor of production. They will rather have fewer overworked labourers than to minimise their profits,’ said Shaku.
Shaku was reacting to South Africa President Cyril Ramaphosa’s announcement this week that he has authorised a series of amendments to the Electricity Regulation Act in order to allow the Independent Power Producers (IPPs) to increase electricity supply to the national grid.
This means the power producers would be able to produce power without going through a long process with the energy regulator.
Ramaphosa said the IPPs would be allowed to generate up to 100 megawatts (MW) of electricity as part of dealing with the energy crisis crippling the economy and said this will relieve Eskom from the current pressure.
Shaku said the IPPs were a gradual introduction of privatised energy production and supply without having to go the traditional way of privatising Eskom because they wanted to avoid the resistance from trade unions.
‘The introduction of IPPs and the subsequent reduction of Eskom’s energy supply will mean energy production and supply is dominated by private corporations whose insatiable desires to maximise profit means they will cut costs production through retrenchments and increase prices of electricity.
Last Friday, Eskom spokesperson Sikonathi Mantshantsha said it was not relevant for Eskom to answer questions about the number of jobs that would be created by the introduction of IPPs.
‘Your questions about jobs to be created by IPPs must be directed to the IPPs themselves,’ he retorted.
National Metal Workers of SA (Numsa) spokesperson Phakamile Hlubi-Majola said the government had embarked on introducing the IPPs because some members of the ANC were benefiting through the project.
Hlubi-Majola said the move would lead to job losses as the closure of coal-fired power stations means that 120,000 jobs would be lost in Mpumalanga.
‘Government has made no social plan to replace those jobs. They haven’t done anything and they will leave it up to the private sector to work it up. That’s what the government of the ANC always does.
‘That transition is not supposed to result in thousands of job losses, and the International Labour Organisation talks about these principles. We are not following these principles at all.
‘We allowed the private sector to come and take over and they are not going to guarantee or replace the 120,000 jobs,’ she warned.
‘We should not be naive and think that these IPPs had been done for the benefit of the South Africans. This is a continuation of the relationship that the ANC leadership has with capital. They are not solving the problem of load shedding, and everything that the president announced yesterday will not solve load shedding immediately.
‘But I can tell you that it will benefit the cronies of the ANC who are connected to the leadership. That’s what it is about. It is about making sure that capitalism enters our state-owned entity. That’s what this ANC government, particularly under Ramaphosa, is about,’ added Majola.
National Union of Metalworkers (NUM) energy sector co-ordinator Khangela Baloyi said his union viewed the IPPs renewable energy as privatisation of Eskom through the back door which would lead to job losses.
‘When you do that you allow private people to produce electricity up to 100 megawatts, and take away the market of Eskom. When you take Eskom’s market share the sales will drop and that will affect the revenue of the power utility. This will lead to job losses because they will have to reduce the number of workers.
‘This is indirectly an announcement of total destruction of Eskom. Because what is going to happen is exactly what happened to SAA, Prasa and Denel. We think this is a structural way of destroying the State Owned Enterprises (SOEs). I remember the 1996 class project where they wanted to privatise all the SOEs and that did not succeed.
‘Now the class project has come back reloaded and is succeeding, especially because most of the people that were making noise then are now quiet.’
However, Congress of South African Trade Union (Cosatu) spokesperson Sizwe Pamla said although they welcomed Ramaphosa’s announcement, it is a long-term plan which people were not looking for.
‘We have been dealing with this load shedding problem since 2008 and we just couldn’t afford to stand this any further. If we have to fix the problem in whatever way we have to fix, that is our position because this is not about workers but the country’s economy that has been staggered. Many of the local businesses were shut down because of Eskom.
‘We are keeping those workers but it is not helping the economy, in fact, it is increasing the cost of living,’ Pamla said.
According to the United Democratic Movement leader Bantu Holomisa: ‘Eskom, Gordhan, Minister of Mineral Resources Gwede Mantashe and Ramaphosa must be sensitive to job losses when implementing the IPPs. We are in a difficult period because this is a transitional period from coal to renewable energy.
‘We are in fear because we are not sure how reliable this renewable energy is. And then you are going to make 300 degrees and clash with the whole institution and people lose their jobs. So a balancing act is needed and that’s what I always insist on in the presidential council on climate change.’
South Africa Community Party (SACP) member of the central committee for media and communications Alex Mashilo argued that the state should meet the socio-economic needs of the people including employment protection and new employment creation as an integral part of the transition agenda.
‘One thing this means is that it is essential to raise the levels of public investment in energy production, transmission and distribution and to build a just transition including through, as a key factor, upgrading and modernising state investment in energy production, with greater attention on renewable and cleaner energy solutions,’ said Mashilo.

  • More strike action by Tshwane municipal workers might be on the cards, as the regional SA Municipal Workers (Samwu) say they are disappointed that Mayor Randall Williams cancelled a meeting with the union at the last minute.

The meeting was scheduled to take place last Thursday to look into some of the grievances contained in a memorandum handed over to Finance MMC Mare-Lise Fourie during the workers’ march on June 1.
Regional Samwu chairperson Nkhetheni Muthavhi said the union would convene a meeting with its shop stewards to decide on the way forward.
Although he did not want to pre-empt the meeting outcomes, he foresaw the possibility of workers protesting outside Tshwane House until such time Williams responded to their demands.
He told the Pretoria News that the union took umbrage after the mayor failed to prioritise a meeting to address labour-related issues with worker representatives. ‘He missed an opportunity to engage with us and hear why we are raising certain issues. Some of the issues that we are raising are very practical and they just need an in-loco inspection. For example, we are saying power stations are not working. You just need to go there and see it for yourself instead of relying on official reports.’
Chief of staff Jordan Griffiths confirmed that Williams had to cancel a scheduled meeting with both Samwu and the Independent Municipal and Allied Trade Union (Imatu) due to ‘personal urgent matters’.
‘Indeed, there was a meeting scheduled with both unions, Samwu and Imatu. We don’t choose favourites in the City of Tshwane (when it comes to workers’ unions). We make sure we always engage with both unions,’ he said last Friday.
‘Unfortunately, we had to cancel the meeting as a personal urgent matter arose, which the executive mayor had to attend to,’ he said.
Griffiths said a face-to-face meeting had already been rescheduled to take place with the union leadership.
During the march two weeks ago, Samwu demanded a salary increase of R4,000, and housing allowance of R3,500 for all workers, among other issues.
The union also bemoaned the fact that it had been engaging the City in the past four years to ensure that municipal buildings were compliant in line with Occupational Health and Safety Act requirements.
‘In December 2020, Samwu wrote to the Executive Mayor on non-compliant buildings, but to date nothing has been done.
Regarding the power stations, the union said: ‘The City of Tshwane is blessed with two power stations (Rooiwal and Pretoria West) with a capacity to generate 400 megawatts. Noting the challenges experienced by the country in terms of electricity generation, capacity of these two stations can cushion the City against load shedding.’