South African state-owned power utility Eskom has increased its wage hike offer to trade unions to 5.5%, up from 3.5% proposed last year, though the revised offer remains well below union demands, a document seen by Reuters showed.
Eskom, long a drag on Africa’s most industrialised economy due to power cuts and financial strain, has seen a sharp improvement in the performance of its coal-fired plants, allowing it to suspend nationwide electricity blackouts. The utility reported its first full-year profit in eight years in the last financial year.
The new wage proposal was presented this week during a second round of salary negotiations with the three major unions representing Eskom workers.
Under the proposal, the 5.5 percent pay increase would take effect on July 1, when the current three-year wage agreement expires. The offer also includes adjustments to benefits such as housing, according to the document.
An Eskom spokesperson confirmed the revised wage offer.
Trade unions are seeking salary increases of up to 15 percent, far above South Africa’s annual inflation rate, which stood at 3.6 percent in December. The central bank has indicated inflation may have peaked.
A third round of wage talks is scheduled for February, said Khangela Baloyi, energy sector coordinator for the National Union of Mineworkers.
Eskom’s existing three-year wage deal, concluded in 2023, provided 7 percent annual increases for non-managerial staff.
The former state monopoly, which still generates the bulk of South Africa’s electricity, has signalled it would prefer to reach another multi-year wage agreement.
Previous wage disputes have led to strikes that disrupted power generation and triggered blackouts. However, the potential impact of any industrial action this time is less clear, as Eskom’s improved generation capacity has created some operational headroom.
