South Africa’s power utility, Eskom, faces labour pressure as workers demand a 15% wage increase just as the company records its first full-year profit in eight years.
The National Union of Mineworkers (NUM), which represents about 15,000 Eskom employees, insists the raise is justified given the utility’s recent turnaround.
NUM said the company’s return to profitability shows there is room to reward workers who endured years of financial instability, wage restraint, and load-shedding.
Eskom has stabilised its power grid after years of blackouts and is now repositioning for long-term growth.
Eskom recently reported a R16 billion ($926 million) profit after tax for the year ended March 2025, a sharp reversal from the R55 billion ($3.2 billion) loss recorded a year earlier.
The improvement marks a significant milestone for the utility, which had relied heavily on government bailouts to remain stable.
Chief Financial Officer Calib Cassim said Eskom’s focus remains on strengthening financial sustainability.
The company reduced its total debt from R412 billion ($23.9 billion) to R372 billion ($21.6 billion) in the past year and is targeting a further reduction to R300 billion ($17.4 billion).
However, Cassim noted that Eskom would only return to the bond market in 18 to 24 months, once borrowing conditions improve.
Eskom’s ongoing challenges
Despite the turnaround, challenges persist.
The utility continues to grapple with mounting unpaid bills, with community debts rising 27% to R94.6 billion ($5.5 billion) by March 2025.
These unpaid debts continue to put pressure on Eskom’s finances, making it harder for the company to manage its operations and improve its overall financial stability.
Eskom acknowledged NUM’s latest demand but said it would not comment further until formal negotiations begin.
A spokeswoman stressed that the utility remains committed to engaging all recognised unions through the established central bargaining forum.
Tensions could surface early in the talks due to Eskom’s plan to allow its newly separated generation, transmission, and distribution units to negotiate independent union agreements.
NUM has warned that decentralisation could weaken union influence, arguing that all units must remain under the same wage framework as Eskom Holdings.
Following a report by the Council for Scientific and Industrial Research (CSIR), Eskom lost approximately R481 billion ($27.9 billion) in economic output due to load shedding in 2024.
This marks an 83% decline from the R2.8 trillion ($162.4 billion) lost in 2023, highlighting improved reliability at the country’s coal-fired power plants, which supply the bulk of South Africa’s electricity.
Wage talks history
Negotiations between Eskom and labour unions have often been tense.
In 2022, the parties reached a 7% wage agreement that ended a one-week unofficial strike.
The strike had worsened South Africa’s electricity shortages.
In 2023, during a fresh round of talks, NUM initially demanded a 15% pay increase but later reduced it to 12% after Eskom presented its financial challenges.
The outcome of these wage negotiations could have significant implications for Eskom’s financial planning, as any increase would affect the utility’s budget and long-term sustainability.
It could also impact South Africa’s electricity supply, since unresolved labour disputes in reaching an agreement may disrupt operations and influence power availability across the country.
