(Bloomberg) -- South African labor unions that oppose the government’s plans to split embattled state-owned power utility Eskom Holdings SOC Ltd. into three units will ultimately have to support the reforms, according to Mineral Resources and Energy Minister Gwede Mantashe.
Eskom, which supplies about 95% of the nation’s electricity and is seen as the biggest threat to the economy, is reliant on government bailouts as it struggles under 440 billion rand ($28.6 billion) of debt while reporting annual losses. Mantashe is one of the key officials charged with ensuring that there is a reliable power supply and Eskom becomes financially sustainable.
“The unions are going to get behind the plan,” Mantashe said in an interview with Bloomberg TV in Johannesburg. “We have a duty to do what is right for the country, more than what is just right for unions and workers, and we must do what can save the economy, what can save the country.”
Mantashe is a former secretary general of the National Union of Mineworkers, which along with the National Union of Metalworkers of South Africa, represent the bulk of the utility’s 46,665 workers. Both labor groups have rejected plans to separate Eskom into generation, distribution and transmission units under a state holding company, fearing the move would be precursor to privatization and job losses.
Eskom “must be redirected and managed properly,” said Mantashe, who served on the utility’s board in the 1990s. “If it fails, that would be a disaster for South Africa.”
Mantashe also revealed that a long-awaited update of the government’s future energy blueprint, known as the Integrated Resource Plan, will be presented to the cabinet within the next two weeks. Technologies being considered to replace aging coal stations include modular nuclear plants, gas, hydro, solar and wind, he said.
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