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The National Union of Mineworkers (NUM), one of the largest unions in the energy and mining sectors, says it will explore all available options, including legal action, after President Cyril Ramaphosa endorsed a report paving the way for Eskom’s restructuring.The union said this was without “meaningful engagement” with it. The Cosatu affiliate is firmly opposed to the unbundling of the power utility into three entities responsible for generation, transmission and distribution, arguing that it is a step towards privatisation. It said privatisation threatens job security, drives up electricity costs and undermines South Africa’s energy sovereignty.In a letter dated June 18, which Business Day has seen, NUM general secretary Mpho Phakedi invited Ramaphosa and the Eskom board, among others, to urgently embark on dialogue over the restructuring of Eskom. “We do this because of what we view as the profoundly negative impact of this decision on not only the market but also on the already high unemployment rate in our country,” the letter says. Phakedi said NUM has expressed its concerns and “opposition to the unbundling of Eskom” as it amounted to the “imposition of a neoliberal project that will most certainly endanger the country’s energy sovereignty as well as the entire economic trajectory”. The NUM is concerned with what it called a linguistic shift, “where unbundling is used as a strategic euphemism to mask privatisation and hollow out the state”. Phakedi said the union’s view is that the provision of electricity should not be left in the “precarious hands of the private sector, whose primary motivation is the making of profit at all costs, rather than the government’s strategic objectives of ensuring a more equal society and a better life for all”. “We believe the transfer of transmission assets to an independent entity threatens the long-term sustainability of Eskom and will undermine its financial viability,” Phakedi said, adding there should be meaningful consultation before finalising the envisaged Eskom restructuring. On Thursday, Phakedi said the union is disappointed that Ramaphosa, a former NUM leader, has not acknowledged receipt of the union’s letter nor responded to it before endorsing the Eskom restructuring task team’s report. “We will continue engaging the government and civic society on this matter. The issue of legal action will be explored too.” Business Day reported this week that Business Leadership South Africa (BLSA) CEO Busi Mavuso has urged the government to move ahead with the implementation of an independent transmission system operator after Ramaphosa endorsed the first-phase report of the restructuring task team. In his state of the nation address in February, Ramaphosa announced the establishment of the task team to oversee Eskom’s restructuring, with the aim of creating a fully independent, state-owned operator. The new entity would own and manage the country’s transmission assets while operating the electricity market. The move is widely regarded as a cornerstone of South Africa’s electricity sector reforms, which are aimed at creating a reliable, affordable and sustainable power supply by opening the grid to greater competition and improving the efficiency of electricity transmission. The task team is made up of representatives from the presidency, the Treasury, department of electricity & energy, Eskom and the National Transmission Company South Africa.In her weekly newsletter on Monday, Mavuso said Ramaphosa’s endorsement of the task team’s phase 1 report provides the clearest vision yet for the system operator and the foundation of a competitive electricity market. “I welcome that endorsement unreservedly … The president has now made that policy unambiguous, and there cannot be any further debate,” she said. Ramaphosa said the task team report shows how the government could ensure that the architecture of the electricity sector can change as it continues to evolve. This, he said, will create the foundation for the country’s growth. “The report reflects a clear and unified vision across government to establish an independent transmission system operator, which will be separated from Eskom. The system operator is a key enabler of a successful competitive wholesale electricity market that is expected to deliver reliable and cost-effective electricity,” Ramaphosa said, adding that the reform will support higher rates of economic growth, investment and job creation. Presidency spokesperson Vincent Magwenya said Ramaphosa has already met the NUM leadership and the government will “continue engaging all organised labour formations in this regard”.Business Day
