Gordhan Backs Eskom Board In Wake Of Load Shedding

Public Enterprises Minister, Pravin Gordhan. PICTURE: MoneyMarketing

JOHANNESBURG: The power utility implemented stage one and two load shedding at the weekend, blaming the recent strike over wages for its problems.

Public Enterprises Minister Pravin Gordhan says Eskom’s board is professional and if given the space to do its work, it will supply electricity in line with the country’s demands despite disruptions.

Eskom claims that protesting workers sabotaged the grid after countrywide marches last week, but unions have denied this.

Gordhan refused to enter speculation over whether jobs will be shed amid financial difficulty at the parastatal.

“That is something the board is looking at but there’s no doubt, for example, in the management tiers. Some years ago, you had 80 senior managers. Today you have about 400 to 500 senior managers. The various structures in some of those tiers have really gone out of kilter. There’s some very hard work to do.”

Eskom, which produces more than 90% of South Africa’s power, refused to cede to demands by the National Union of Mineworkers (NUM) and National Union of Metalworkers of South Africa (NUMSA) to raise salaries by 15%. A third union, Solidarity, is also unhappy with Eskom’s decision to keep salaries flat. However, all parties agreed to negotiate a new wage deal and restore production to prevent further blackouts.

Eskom narrowly avoided a liquidity crunch early this year and was embroiled in corruption scandals involving the Gupta family, friends of former president Zuma. Zuma and the Guptas have denied wrongdoing but their relationship will be the focus of a government corruption inquiry that is due to start in August.

President Cyril Ramaphosa has made stabilizing state-owned firms, such as Eskom, a priority since he replaced scandal-plagued Jacob Zuma in February, in an acknowledgment of the threat they pose to the country’s strained public finances.

Ramaphosa oversaw the appointment of Eskom’s CEO Phakamani Hadebe on an interim basis in January in a bid to clean up governance and set the firm on a firmer financial footing. Hadebe’s appointment was made permanent last month.

Additional reporting by Reuters.