SHOP stewards from the National Union Mineworkers have decided to go ahead with a national strike on May 26, two weeks before the kick-off of the football World Cup and on the day that the first foreign team arrives on South Africa.
This from Sapa:
The strike – which was suspended last year pending negotiations- would begin on May 26 and a massive march would take place to Megawatt Park, Eskom’s headquarters.
“Workers demand that Eskom should address all their outstanding issues from last year’s negotiation cycle,” the NUM said in a statement.
This included a housing allowance.
“Amid several marches and memoranda delivered to Eskom, the parastatal is yet to respond to the demands.”
Eskom was not able to comment immediately.
These sorts of labour issues ought to have been settled some time ago in a compact between government, labour and business designed to avoid ugly scenes while South African is on show to the world.
We now face the prospect of disruptions to electricity supply as the cup gets underway.
This must be treated as a national emergency and our political and trade union leadership must step in to avoid a catastrophe.
THERE is a growing likelihood that hundreds of thousands of workers will down tools on the eve of the Football World Cup if Cosatu gets its way.
The union federation is applying to Nedlac for permission to call a general strike in protest at the planned hike in electricity prices.
There is no question that this hike will place many jobs in jeopardy and that it will have a chilling effect on the economy which is only just peeping above the parapets after the recession.
The rising cost of electricity has a lot to do with the ineptitude of the state and Eskom which failed to plan for increased consumption and failed to open the supply and distribution to competition which would have brought prices down.
This monumental failure has cost our economy dearly and Cosatu is understandably angry that consumers are being asked to finance incompetence.
But has the union federation thought of the economic consequences of blowing this country’s hosting of the World Cup?
It is by now a well-established fact that Cosatu strikes are accompanied by violence, sometimes of the most brutal kind.
The spectre of mass protests, violent encounters with police and assaults on workers who do not strike will play directly into the hands of those who want to paint this country — and this continent — as unfit to host tournaments of this sort.
This nation must make this tournament a showcase of democracy, tolerance and love of the beautiful game.
This is literally a once in a lifetime opportunity and if it is blown we will saddle many generations with a broken legacy.
Let’s hope that Cosatu is posturing and will not got through with this strike. Or we will all live to regret it.
YOU have to ask yourself how long Barbara Hogan will be allowed to continue as Public Enterprises minister following her public criticism of the ANC’s shareholding (via Chancellor House) in Hitachi Power, which stands to benefit enormously from Eskom’s controversial capital expenditure programme.
Eskom has a R385 billion construction programme and Hitachi Power has won contracts to build the boilers for two new power stations – Medupi and Kusile.
Some have estimated that the ANC could rake in a cool R5 billion from this association.
Hogan said on Monday: “A conflict of interest in a sense that the ruling party benefited from this thing? Yes, certainly it is not desirable.”
She is clearly not grasping the essence of the crony state which is there to provide money for the ANC and it’s elite through business dealings on the side. Just last week, President Jacob Zuma said he saw nothing wrong in Julius Malema benefitting from government contracts in the construction industry.
The Wild Frontier’s money is on Hogan getting herself reshuffled so that someone with a better understanding of the ANC’s relationship with money can take this portfolio.
I knew that would get your attention. But that’s exactly what the National Electricity Regulator has just approved by agreeing to a 25% increase in power charges.
This means that for no new services we will be coughing up hundreds of rands more to the parastatal Eskom.
I don’t buy into the idea that there were no alternatives.
The questions that should have been asked before such a raise were:
1. Is there sufficient competition in the production and distribution of electricity to make the pricing competitive. Answer: No.
2. Are there savings that can be made by making Eskom more efficient? Answer: Yes.
3. Does the negative effect on growth and inflation justify an increase? Answer: No.
But this is not how government regulators conduct their business. They indulge these fat parastatals, protect them against competition and make us pay ever higher bills.
The comments of Nersa chair, Cecilia Khuzwayo did not inspire confidence.
She said: “It is clear that the economy is now in recession mode”. This is simply not true. If she had done her homework, she would know that the economy grew by 3,2% in the fourth quarter signalling that the recession was very much over.
It suggests that Khuzwayo doesn’t know what’s going on in the macro economy which is, frankly, pathetic for someone in her position.
Her remark that “Electricity is the democracy of the country” is weird. Why is she then imposing a tax on democracy? Does she think its a bad thing?
YOU are situated on the Southern tip of Africa, far away from the world’s markets to the east, north and west. You have a highly unionised labour force and inflexible labour laws that make hiring a very large commitment. Your wages are way in excess of those of your competitors. Your country is one of the most dangerous in the world with raging crime statistics. Your desperately need foreign investment.
Ranged against all these obstacles (many of which could be eliminated by effective government) you have only four competitive advantages to the industrial investor.
The first is a relatively stable macro-economic and political environment.
The second advantage is that you are the gateway to Africa when it comes to financial services, political influence and sophisticated infrastructure. The third is that you are a resource producing country which can offer a range of raw materials without massive transport costs to plant. The fourth is that your electricity is the cheapest in the world.
What government is supposed to do is to diminish our disadvantages and enhance our competitive advantages.
There is nothing that can be done about the accident of geography, but there is much that can be done to change the rest of our investment environment by adopting the right policies and playing to our strengths.
We can make our labour market more competitive by reviewing our archaic labour laws. We can fight crime by improving policing and bolstering our criminal justice system.
When it comes to our advantages, we can do a lot more. We can integrate much better with Africa, welcoming African skills onto our shores by getting rid of our ridiculous immigration laws.
We should be embracing Africans instead of treating them with suspicion and we should be turning South Africa into a country that is proudly and assertively African.
We can build on the competitive advantage our financial services sector enjoys on the continent and clear the way for our banks to expand their networks in Africa by turning this into an industrial development priority.
This would mean actively developing skills in this area and turning our priorities from defensive ones aimed to keeping alive industries in sectors where we cannot compete to an aggressive one that seeks to drive home our strengths.
Another strength we should be driving home is our competitive advantage when it comes to cheap energy.
That is why massive investments have been made by the likes of BHP Billiton in smelters on our shores despite the fact that they are far from the markets where the finished product will be sold.
But what has government actually done to diminish our weaknesses and build our competitive strengths?
With the exception of crime, where we are at least blustering in the right direction, the answer appears to be “very little, indeed”.
There is a danger that not only are we doing very little to attract investment, but that the very structure of our politics mitigates against us prioritising this.
We have a political elite that has, despite its many utterances to the contrary, closed the door on job creation.
Dependent on “allies” to the left to keep its political power, the elite has begun concentrating its energy on the futile task of preserving uncompetitive jobs instead of creating new ones where we can compete.
Add to this the fact that this alliance makes it impossible to review the labour laws which reduce the flexibility of the labour market and the possibility of creating jobs is further diminished.
Ideological choices which harken back to statism are being made.
Instead of embracing the skills, talent and the markets of Africa, we appear quietly hostile to Africans.
Our leaders travel the continent meeting with heads of state and attending summits, but back home they do precious little to make South Africa a welcoming place for Africans.
Low-level xenophobia is allowed to continue with very little active intervention. Has anyone been prosecuted for the shocking slaughter of hundreds of foreigners in the xenophobic attacks? Apparently this is not a law enforcement priority.
Which brings us to the questions of electricity.
Last week the respected economist Mike Shussler pointed out that we are about to become among the world’s most expensive producers of electricity.
We have already lost precious foreign investment in a smelter in the Eastern Cape because of our high electricity prices.
The three consecutive increases of 45% proposed for electricity will sound the death knell for heavy industrial investment and could cause those already here, such as car manufacturers to reconsider.
We had better wake up to the reality of competing in a ruthless world. We don’t need faux Ubuntu, we need the competitive mindset of Shaka Zulu.
STATEMENT BY BOBBY GODSELL ON ESKOM
During this last week the ESKOM Board has been able to act decisively. Government, particularly as indicated by Minister Hogan’s address to Parliament, has given the Board the backing it needed.
Mpho Makwana has already demonstrated his wise and calm leadership capacities in the press conference he conducted last Thursday. The strong management team will soon be strengthened by new appointments in both Finance and HR. ESKOM is ready to move forward under new leadership. It is this new leadership that must write the new chapter.
I have therefore reconfirmed my resignation to Minister Hogan.
12 November 2009
Address by the Minister of Public Enterprises to the National Assembly on recent developments at ESKOM
1. Mr Speaker, I would like to thank the House for the opportunity to account to it as Shareholder for ESKOM.
2. Regrettably, the past 14 days have been a turbulent time for Eskom and the economy, due to a breakdown in the relationship between the Board and its former CEO.
3. Unfortunately, the dispute did not remain an internal matter for the company to resolve in terms of its own governance framework, as it should have, but disturbingly, it entered the public domain through groups with their own political and vociferous campaign in support of one party against another. They provided undue pressure through a never-ending stream of public commentary that sometimes had no basis in fact or law, and only served to inflame and exaggerate an already complex and difficult boardroom matter. This is indeed lamentable. Read More…
RESIGNATION OF ESKOM BOARD CHAIR
On Wednesday 28th October, 2009, Eskom’s CEO, Mr Jacob Maroga,
offered to resign. The Board accepted the resignation. The Board’s legal
advice is that the resignation was quite clear in its intent, and the Board was
entitled to accept it.
On Thursday 28th Mr Maroga denied resigning. The Board offered to submit
this dispute of fact to binding private arbitration. Mr Maroga has not
responded to this offer.
On Sunday, 8th November the Board proposed a comprehensive set of
measures which would have had the effect, if agreed by Mr Maroga, of
requiring the Board to state its case for why it believed the relationship with
Mr Maroga had broken down irretrievably. Mr Maroga would then be given
a reasonable period of time in which to respond. Mr Maroga rejected these
Thus far government, as ESKOM’s sole shareholder, has been unable either
to support the Board’s original decision (to accept the resignation) or its two
attempts at resolving this dispute.
In these circumstances, and with the best interests of the organisation in
mind, the only course of action seems to me to resign as Chair and as
ESKOM is a critical national asset. The talented, dedicated and highly
experienced people who work at ESKOM are more than capable of meeting
its present challenges. My hope is the Government will move quickly to
ensure united and effective leadership.