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A debate in the National Assembly looking for solutions for Eskom's energy crisis saw Public Enterprise Minister Pravin Gordhan saying that government intends to strengthen Eskom's board with members who have engineering skills and experience in turning around institutions. A chief reorganisation officer will also be jointly appointed by Finance Minister Tito Mboweni and Gordhan to carry out the turnaround plan for the utility. 

Eskom will be unbundled into three entities that will focus on generation, transmission and distribution. All three entities will remain state-owned, and Eskom will be receiving R23 billion a year for the next three years from government to help it pay off its debt and to facilitate the turnaround. The transmission entity will be established first, with a board to be appointed by mid-2019, Gordhan said.

Eskom restructure becoming clearer

He also told parliament that Eskom’s salary bill continues to increase and the bloated management layers are of concern. “We have started engagements both as a political organisation, but more importantly as government to say how best do we manage this,” he said.

Various studies have found that Eskom, which has more than 35 000 employees, is overstaffed. A 2016 World Bank study of utilities in Africa, which looked at the staffing data for 36 countries, found that Eskom needs a workforce of 14 244. While the restructure of the utility will lead to job losses, Gordhan said that government and Eskom have a responsibility to the utility’s 48 000 employees to ensure that they have some sort of job security, which will involve preparing them for the shift in the energy sector which is moving towards renewables.

Despite these assurances, unions are up in arms about the changes at Eskom. A number of unions are instigating strikes at the utility “in defence” of Eskom. The National Union of Metalworkers of South Africa (Numsa) has called for unity of all workers across various sectors of the economy to take to the streets, including workers from NUM, Saftu and Cosatu.

According to Numsa, crisis at Eskom was a self-generated crisis caused by IPPs, inflated coal costs, a bloated top executive structure, tender corruption and cost overruns at Medupi and Kusile power stations. Its gripe with the independent power producers (IPP) programme was that there was no fair procurement process over their awarding, the union said

Numsa says it is demanding an independent commission to investigate the procurement process involved in the IPPs, in the interest of fairness for those who are conflicted or not conflicted, as it has accused Energy Minister Jeff Radebe of being “clearly conflicted” given his proximity to President Cyril Ramaphosa and billionaire businessman Patrice Motsepe. Radebe and Ramaphosa are both brothers-in-law to Motsepe, who has denied that his energy company stood to benefit in the IPP programme.

Gordhan told parliament that the Minister of Labour is arranging a meeting between the Department of Public Enterprises and the National Economic Development and Labour Council (Nedlac) to provide a better understanding of the issues at Eskom and the plans in place to turn things around. Government has also engaged with CEOs of coal mining companies, who have provided more insights on the pricing of coal. Government has received recommendations from them, which will be taken into consideration for the turnaround, he said.

Image Credit Flickr/GovernmentZA: https://www.flickr.com/photos/governmentza/10439446966

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