South Africa’s battered economy and exhausted consumers cannot afford Eskom’s proposed 24 months load shedding timeframe

23 January 2023

The Congress of South African Trade Unions (COSATU) rejects Eskom’s plan to continue to implement load shedding for another twenty-four (24) months.  This is something that South Africa’s battered economy, consumers, workers, businesses cannot afford. South Africa’s economy is still struggling to emerge from the deepest recession in living memory, a devastating global pandemic, the July 2021 violence, and the March 2022 floods.

The plan by Eskom for two (2) years of continuous load shedding will be an unmitigated calamity. This does not only threaten to reverse the beginnings of the economic recovery and the 3% decrease in unemployment that we saw in 2022, but it also threatens to collapse countless SMMEs and send hundreds of thousands of workers onto the unemployment line.

Restaurants and retailers need electricity to sell their goods to customers and be able to pay their staff.  Farms as was shown with the death of 50 000 chickens on a single farm, need their machines to be running. 

These proposed power cuts will be an unbearable burden for working class households, who need reliable access to electricity to feed their families and for affordable transportation on their way to work. Working class students will pay a huge price because they do not have access to alternative energy sources at school and at home.

The mining industry cannot operate with these stop-go loadshedding hours.  Communities, in particular women and girls, are exposed to increased levels of violent crimes, when streetlights are not working on their way and back from work. 

This demoralizing timeframe comes on the back of NERSA’s callous decision to grant Eskom an 18.65% increase in tariff prices in April and a 12% increase pencilled in for 2024.  We endorse President Ramaphosa’s support for our call for this excessive 18.65% tariff hike to be suspended.  The power utility and municipalities need to listen to and comply with this call.

This never-ending saga of load shedding and double-digit tariff hikes has led to many of its clients deserting it and worsening its survival prospects.

Many key Eskom costumers, such as the mining industry which accounts for 30% of its customer base, shopping centres and countless other large consumers are going off the grid. At this rate Eskom will be left only with those who cannot afford to go off grid. 

This deterioration is what prompted COSATU in October 2019 to draft the Eskom Social Compact that was adopted by government and business partners in December 2020.  The Social Compact provided a clear road map to resolving the fundamental crises crippling Eskom and plunging the nation into unabated load shedding. 

These included clear proposals for slashing Eskom’s debt by over 50%, dealing with rising levels of municipal and other debt owed to Eskom, tackling rampant corruption and wasteful expenditure. 

The Social Compact proposed measures to speed up maintenance of existing generation capacity and to bring onboard new clean energy capacity to ensure a Just Energy Transition for affected workers and communities.  This plan was focused on unlocking the potential for green manufacturing jobs. Despite signing the Social Compact, government has continuously postponed the implementation of its key commitments.

We reiterate our call for government to relieve Eskom of at least two thirds of its debt burden and allocate additional funding for Eskom to purchase diesel to help reduce loadshedding in the 2023/24 budget due to be tabled in Parliament next month.

The President needs to declare a state of disaster to ensure that the government and Eskom have the necessary powers to expedite the acquiring of spare parts, the conclusion of procurement processes and the acceleration of bringing on grid new generation capacity. 

The Department of Mineral Resources and Energy needs to grant Eskom the diesel import license it has long been calling for, which will help it to effect significant savings.  We are worried that law enforcement agencies are struggling to prosecute those who have stolen billions from the power utility and break the spine of corrupt cartels that continue to loot the power utility.  

If the government does not address these root causes of Eskom’s crises, we will continue to experience load shedding for the next decade.

The Federation is also deeply concerned that Eskom and government have not even begun the process of appointing a new CEO despite the incumbent, Mr. De Ruyter informing government at the beginning of December of his intention to leave in March.

The shoddy governance and poor management systems at Eskom are the root cause of the ongoing crisis. The ANC government’s ongoing mismanagement of Eskom will be its undoing. 

This two-year proposed time frame is being thrown around by an institution that has not tabled a coherent and convincing road map on what they intend to do to drastically scale down electricity cuts just in the next six (6) months. We are being forced to tolerate mediocrity or business as usual while we are facing a national emergency.

Issued by Sizwe Pamla, National Spokesperson, COSATU, 23 January 2023