Wage protests lead to South African power outages

* Eskom says some power plants operating below capacity

* Unions have threatened 'total shutdown'

* Company produces more than 90 pct of South Africa's power

* President oversaw changes at Eskom to clean up governance (Updates after Eskom begins power outages)

By Alexander Winning

JOHANNESBURG, June 14 (Reuters) - South Africa's struggling state utility Eskom started controlled electricity outages on Thursday, after trade union pay protests at its power plants prevented it meeting demand.

The last time there were controlled power outages in Africa's most industrialised economy, in 2015, economic output suffered. Power cuts during winter are likely to cause hardship for millions.

Labour unions have threatened a total shutdown of Eskom's operations unless it meets their demands for a 15 percent pay rise. Eskom plans to offer no increase.

About 1,000 union members picketed outside its Megawatt Park headquarters in Johannesburg. Protesters at power plants blocked trucks carrying coal and buses ferrying staff, forcing some generating units to be switched off.

Eskom, which produces more than 90 percent of South Africa's power, narrowly avoided a liquidity crunch early this year and was embroiled in corruption scandals surrounding friends of former president Jacob Zuma.

It said in a statement that it expected the controlled outages - called load-shedding - to last from 5:40 p.m. (1540 GMT) until around 8 p.m.

Shortly afterwards, traffic lights in central Johannesburg stopped working, while some bars showing the opening game of the soccer World Cup lost power.

The National Union of Mineworkers (NUM) and National Union of Metalworkers of South Africa (NUMSA), who together represent more than 20,000 of Eskom's 47,000 employees, say they want to send a "strong signal" to management.


Thabiso Masha, who works in Eskom's research department in Germiston, told Reuters outside Megawatt Park: "Zero percent is nonsense, we won't stand for it. Petrol is going up, VAT is going up, so our pay is decreasing."

An employee in Eskom's distribution operation in Johannesburg, who asked not to be named, said: "It's not the workers' fault that the company is suffering because of corruption ... They are preparing for job cuts."

Two workers held up a placard reading "0% equals 0 Megawatt". Another read: "To hell austerity measures".

Eskom spokesman Khulu Phasiwe said some power stations had reduced output because of "acts of sabotage and intimidation".

"There have been several incidents of road blockades, attacks on staff and wilful damage of electricity infrastructure. As a result, all road coal deliveries have been stopped for security reasons," Eskom said in a statement.

Stabilising Eskom's finances is a priority for President Cyril Ramaphosa as he looks to rekindle growth after nine years of stagnation under Zuma.

Ramaphosa oversaw the appointment of a new board and chief executive at Eskom in an attempt to clean up governance and set the company on a firmer financial footing.

Separately, the energy regulator NERSA gave Eskom the go-ahead to raise prices to recover 32.7 billion rand ($2.5 billion) of costs incurred over three previous years, about half what the utility had requested.

Eskom said it would study the decision before commenting. ($1 = 13.1788 rand) (Additional reporting by Olivia Kumwenda-Mtambo Editing by James Macharia and Kevin Liffey)

First Published: 2018-06-14 11:32:28
Updated 2018-06-14 19:42:05

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