Eskom’s Biggest Union Blames South African Power Cuts on CEO

(Bloomberg) -- The biggest labor group at South Africa’s Eskom Holdings SOC Ltd. blamed “poor leadership” for ongoing nationwide power cuts, a discordant sign as the utility embarks on a plan to become profitable again.

The National Union of Mineworkers is “very disappointed with the performance” of Eskom Chief Executive Officer Andre de Ruyter and the lack of a plan to prevent outages, it said Thursday in a statement. The group also continues to oppose the use of independent electricity producers, which Eskom is counting on to help increase generation.

South Africa could experience power shortages through at least April, presenting another threat to an economy already hampered by the effects of the coronavirus pandemic. Eskom is saddled with 464 billion rand ($31.3 billion) of debt and has been unable to provide reliable power since 2008, when outages began.

READ: Eskom Bailout Emerging as Equity Swap by Biggest Bondholder

“Eskom has regularly communicated its plan to improve the performance of the power stations and to reduce loadshedding,” the utility said in response to questions, using a local term for power cuts. There is “a good working relationship with its labor representatives, including the NUM,” it said.

The NUM, which represents about a third of Eskom’s more than 44,700-strong workforce, urged the government to change the leadership at Eskom. Relations between the labor union and management have been strained in the past over issues, including wages.

The National Union of Metalworkers of South Africa, the second-biggest union at the utility, also criticized the leadership that’s been in place for about a year. “Very little has changed since De Ruyter took over Eskom,” Irvin Jim, Numsa’s general secretary, said in a reply to questions. “They have no ideas on how to fix the problem.”

The government-guaranteed tranche of Eskom 2028 debt yielded 4.7% by 12:40 p.m. in Johannesburg. That’s up from 4.6% on Jan. 4, the lowest since the notes were first traded in 2018.

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