Eskom brings 5.5% increase offer to wage talks

Image credit: Reuters

Eskom has been a long-term drag on Africa's biggest economy through its electricity cuts and financial woes.

But a sharp improvement in the performance of its coal-fired power stations has allowed it to stop implementing nationwide blackouts.

It reported its first full-year profit in eight years last financial year.

The revised wage offer was presented to the three major unions it negotiates with over salaries this week in a second round of pay talks.

Eskom proposed that the 5.5% pay increase come into effect on 1 July, the day after its current three-year wage deal expires, the document showed.

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The offer includes adjustments to other benefits, such as housing.

An Eskom spokesperson confirmed the utility's latest salary offer was 5.5%.

Unions are seeking pay hikes of up to 15%, far above South Africa's annual inflation rate, which stood at 3.6% in December and which the central bank thinks may have peaked.

A third round of wage negotiations is scheduled for February, said Khangela Baloyi, energy sector coordinator for the National Union of Mineworkers.

Eskom's 2023 three-year agreement saw non-managerial employees' salaries increase by 7% each year.

The former state monopoly still generates the bulk of South Africa's electricity and would like to agree on another multi-year wage deal.

Unions have gone on strike during previous wage disputes, triggering power blackouts.

This time around, the potential impact of a strike on Eskom's operations is harder to gauge as the recent improvement in its generation fleet means it has excess capacity.