Labour union the National Union of Mineworkers (NUM) has expressed its opposition to the changes in the Electricity Regulation Act (ERA).

“This is a way to destroy Eskom and hand it over to the private companies the same way South African Airways and Transnet were destroyed,” the union avers in a statement.

The union posits that the unbundling of State-owned utility Eskom into three separate entities will result in increased tariffs, thereby making electricity more unaffordable to the most disadvantaged and poor people. “It will exacerbate energy poverty for many of our poor communities,” the NUM warns.

The NUM made a submission to the portfolio committee against changes to the ERA, which it says were not taken into consideration. “These changes are an insult to the poor and the marginalised,” the NUM states.

It warns that the changes in the ERA are a step towards the privatisation of Eskom and says the unbundling of State utilities has failed in many countries, resulting in higher tariffs.

“The unbundling is presented to us as a silver bullet for all our problems. We are told that the unbundling will prevent corruption and State capture. As the NUM, we view unbundling as an enabler for State capture and corruption. It is a precursor for the privatisation of our State-owned utility,” the NUM avers.

It points out that Eskom is facing five major problems, namely the drop in electricity sales, the unaffordable price of primary energy, the cost of power purchase agreements (PPAs), poor methods of collecting revenue, and servicing of debts.

The NUM says the unbundling will not be able to solve any of these problems.

“It is a neoliberal ideological pseudo solution provided to us by politicians who are clueless about science and engineering. Politicians must give space to scientists and engineers to come up with engineering and scientific solutions to solve Eskom's problems,” the NUM suggests.

It adds that the Eskom assessment report conducted by German firm vgbe contains most of the issues that NUM has been raising as the challenges that are facing the electricity sector.

The report also confirms that Eskom’s challenges are caused mainly by poor management and governance and has noted that Eskom’s biggest problem is its generation division, the union informs.

It states that the transmission division is doing well, although there are concerns about the age of the network.

Moreover, the cause of loadshedding is attributed to the poor performance of the generation of power plants and not to transmission.

“All these changes are happening without proper consultation. The NUM has referred a case to [private independent dispute resolution company] Tokiso disputing the unbundling process. There is a serious lack of consultation by both the State as a shareholder and Eskom as the employer.

“Our members are in the dark about their future. The Labour Relation Act (LRA) prescribes that companies must follow a proper consultation process before restructuring. In this case, this section of the LRA is ignored,” the NUM says.