The National Union of Mineworkers (NUM) does not support what is currently happening at Eskom and we are vehemently opposed to the Department of Energy signing the 27 IPPs agreements, retrenchments, privatisation of Eskom, closure of power stations and coal mines.
Electricity demand and sales
In late 2017 to early 2018 as Eskom was commissioning more units to the grid, the executive went to both parliament and public to say the company had surplus electricity and that load-shedding was something of the past. To this effect, the company would seek to expand its export sales to the neighbouring countries. This was a huge milestone understanding that already where we stand Eskom contributes close to 40% of the whole continent’s electricity.
IPPs and PPAs with Eskom
At a time when the public was told that there is surplus electricity and that there was a drop in sales, the Department of Energy forced Eskom to sign Power Purchase Agreements (PPAs) with the Independent Power Producers (IPPs) even when Eskom indicated that the country could not afford them. The government took the responsibility of the procurement process of who were the companies to be selected and at what price they would sell.
Electricity to Eskom.
Amongst reasons highlighted by the government in its media briefing was the need and commitment to reducing CO2 emissions by making use of more renewables and less coal.
Eskom currently sells a unit of electricity at around R0.85 yet government signed contracts with the IPPs buying electricity from them on behalf of Eskom at around R2.14 per unit. This meant that per unit that Eskom buys it instantly loses about R1 per unit or more.
These IPPs are a forced privatization strategy by the few and are of no benefit to the majority and to the country. Inside these agreements, there is something called pass through. What this basically means is that Eskom must buy the electricity from these IPPs at whatever ridiculous cost and it must claim back its money from consumers through electricity price hikes that must be effected through NERSA. Eskom is going through financial problems under the watch of government and yet we are all expected to keep quiet.
The NUM is not against renewable energy or IPPs. We are extremely worried about the thousands of jobs that are going to be destroyed in Mpumalanga. The most painful thing is that the renewable energy produced by the Independent Power Producers (IPPs) is going to be sold through Eskom. We are saying and we have said that Eskom is a government entity, if the IPPs have got power to generate, let them stand alone and compete with Eskom. The NUM is going to defend these jobs.
Before we get to this issue of retrenchments it’s important to provide some clarity to those less informed particularly of the worker struggles so that before they shoot from the hip in the future they are at least informed. The trade unions primary role is the preservation of worker employment regardless of membership status, nationality, race, and rank.
In the past financial year, Eskom through its financial statements indicated an EBITDA loss of just under R3 billion.
In this same period employees who worked very hard and consistently ensured that the country lights were kept on did not receive their well-deserved performance bonuses.
As this was happening, Eskom indicated that it continues to be constrained in terms of meeting its financial obligations particularly the payment of its debt and also its operations.
As a result of these constraints, the talks for possible retrenchments and due to a bloated structure where a presentation was done in parliament. Eskom relied on the World Bank study into staffing levels at Eskom. The study shows that Eskom is overstaffed by 66% and only requires 14 244 employees. This mischievous study ignores the fact that Eskom customer base has increased to six million. The study also undermines the development role of Eskom and its assistance to government of meeting the targets of the National Development Plan.
The company amongst some of its measures to remedy the financial situation resorted to rather cut jobs instead of solving its real challenges.
Eskom is owed more than R13 billion by municipalities. This means that Eskom workers produced electricity that was meant to be sold and it has now been donated for free to these municipalities as a charity case. More painful is that the executives of these municipalities sold the electricity and never paid Eskom what is due to them.
If the municipalities were to pay their outstanding debt alone, Eskom would have reported positive profits of at-least R10 billion in the last financial year and there would not be any talks of bloating and restructuring.
The current discussion about coal being dirty is mischievous and disingenuous aimed at creating space and providing a fictitious rationale for the renewables. The discussion that we are supposed to be having is how best to exploit technologies and spend time on more researches on clean coal technologies.
We cannot talk about decommissioning coal-fired power stations to reduce carbon dioxide emissions while we continue to mine the coal and export it to other countries to run their own coal-fired power stations and contaminate the very same atmosphere that we are claiming to save. Coal mining companies must start investing in clean coal technology to deal with the issue of emissions. We do not understand why Greenpeace wants the coal power stations to be all decommissioned. Whose interests are they representing?
The government must scrap PPAs with the IPPs. The government must pay the outstanding municipality bills. Eskom problems will be solved and the public will be spared from the ever-rising electricity increases.
We will fight privatization of Eskom and retrenchments with all we have no matter at whose irritation that will be and we will stop at nothing but victory.
The NUM will this coming Saturday (17 November 2018) will be embarking on a march to Union Buildings in Pretoria marching against the IPPs, retrenchments, privatisation of Eskom, closure of power stations and coal mine. We call upon all workers organised in the mining, energy and construction sectors, community members, truck associations, our sister unions in Cosatu, the ANC alliance partners to prepare themselves so that they can join us on the 17th November 2018 to peacefully march in a protest against the Independent Power Producers (IPPs) and the privatisation of Eskom through backdoors.
The media is invited to attend the march and report.
For more information, please contact:
David Sipunzi: NUM General Secretary: 082 883 7293
Paris Mashego: NUM Energy Sector Coordinator: 079 517 1758
Livhuwani Mammburu: NUM National Spokesperson: 083 809 3257