NUM claims Eskom unbundling is designed to dismantle state asset

The National Union of Mineworkers (NUM) has rejected Eskom’s unbundling strategy, reiterating its opposition to the privatisation of the energy sector.

Minister of Electricity and Energy, Kgosientsho Ramokgopa, approved Eskom’s revised unbundling strategy this week, marking a further step in the restructuring of South Africa’s electricity supply industry.

Eskom’s four subsidiaries

Eskom announced that Ramokgopa approved the board-endorsed structure for a separate utility, comprising a new holding company with four subsidiaries.

The four subsidiaries:

National Electricity Distribution Company of South Africa (NEDCSA).
GenerationCo (GxCo).
Eskom Green – a new subsidiary to house Eskom’s renewable energy business.
National Transmission Company South Africa (NTCSA) – legally separated in July 2024, formerly Eskom Transmission.

The decision to unbundle Eskom has been hailed as a major step in the electricity sector, which will eventually make electricity more affordable.

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NUM not happy

However, NUM is not happy with Ramokgopa’s decision.

In a statement, NUM spokesperson Khangela Baloyi said the union has taken note of media reports about Eskom’s decision.

“These reports suggest a new approach aimed at maintaining ‘strong public oversight’ while supporting a ‘competitive energy market’ as defined by the Electricity Regulation Amendment Act (ERAA).

“NUM wishes to be unequivocally clear: We fundamentally reject the unbundling of Eskom in any form. Our long-standing position remains unchanged, regardless of the proposed structural or regulatory revisions. This policy of separating Eskom into multiple entities is a neo-liberal project designed to dismantle a vital state asset and facilitate the wholesale privatisation of South Africa’s energy sector,” Baloyi said.

Baloyi said the South African economy relies on a single, functioning and publicly-owned Eskom.

“The current trajectory risks the future of energy security and social equity in our country. NUM calls on the government to immediately halt the unbundling process and commit to strengthening Eskom as a unified, state-owned entity.”

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Municipal debt

While Eskom forges ahead with its unbundling strategy, municipal debt remains a concern, affecting the unbundling of the distribution division.

About R105 billion is owed to Eskom, and in November, the entity confirmed to the portfolio committee on electricity and energy that roughly R62.2 billion of that would likely be written off under new Distribution Agency Agreements (DDA).

Under the revised unbundling strategy, transmission assets remain owned by the National Transmission Company South Africa (NTCSA), a subsidiary of Eskom, which will continue to expand and maintain the national grid.