How Ramaphosa is trying to get unions on board with the unbundling of Eskom

President Cyril Ramaphosa met with the National Union of Mineworkers (NUM) this week to address the group’s fears over the unbundling of Eskom.

While the exact plan is not yet clear, Ramaphosa announced in February that Eskom is to be split into three different companies operating under one holding company.

This would see Eskom split into a generating, transmission and distribution company, each with its own strategy and structure.

While the plan has been met with cautious optimism, economists, analysts, investors and other stakeholders have also expressed worry over how vague the plan is.

In its review of the SONA and budget speech where the plan was given some airtime, ratings agency Moody’s – which will deliver its review of South Africa’s credit rating this week – said that the government needs to come clean with the full, detailed plan of the unbundling.

This sentiment was echoed by NUM, which took things a step further by threatening to shut down the country’s power grid in the week before the elections, should the country’s leadership not address its concerns on the matter.

NUM is worried that the unbundling of Eskom would lead to job losses – particularly after the messages coming from the Department of Public Enterprises, which has already stated that Eskom managers are on the chopping block.

The union is also concerned that the unbundling is a veiled attempt to privatise the power utility.

At the meeting between NUM and Ramaphosa this week, the president again didn’t deliver a detailed plan, the City Press reports, but did lay out to union leaders how much trouble Eskom is in, and why the unbundling of the business is necessary.

According to the paper, Ramaphosa reportedly told union leaders that Eskom was out of cash, and would not have been able to pay salaries in April, had it not been for funding from the China Development Bank.

Addressing NUM’s concerns, Ramaphosa reportedly told those in attendance that the unbundling process will not lead to job losses.

However, the president stressed that unbundling Eskom was the only option to turn the failing power utility around, and ensure that it can turn into a profitable business in the future.


Read: Eskom timing could not be worse as Moody’s review looms

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How Ramaphosa is trying to get unions on board with the unbundling of Eskom