South Africa’s Eskom fires 1,000 workers as crisis deepens

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JOHANNESBURG (Reuters) – South African utility Eskom [ESCJ.UL] fired 1,000 workers at a power plant Friday and its executive failed to overturn his suspension, worsening the turmoil at the company.

Africa’s most advanced economy is suffering its most severe power shortage since 2008 as state-owned Eskom struggles to keep the lights .

A union threatened a new walkout after the workers were told their dismissal via text message. They had been accused vandalism at Eskom’s new Medupi plant during a strike this week.

Eskom is also in conflict with its senior management, having suspended CEO Tshediso Matona and three his fellow executives this month while an inquiry is held into the the troubled utility.

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A labour court in Johannesburg dismissed an attempt by Matona to overturn his suspension.

“The application is struck from the roll,” Judge Benita Whitchers said, adding that the challenge by Matona would be decided by the Commission for Conciliation, Mediation and Arbitration – an independent labour arbitrator.

Standard and Poor’s last week cut Eskom’s credit status to junk, saying the suspensions had led to a loss of confidence in the company’s corporate governance.

Eskom has suffered from years of underfunding and investment in new plants has failed to keep with demand.

Labour disruption and technical faults have delayed construction of Medupi for years, increasing costs at the coal-fired plant. Medupi is expected to start partial by July, generating 800 megawatts of extra electricity for the strained power grid.

In this week’s strike, about 21,000 contract workers, not directly employed Eskom but by firms contracted to the plant, were protesting against poor living conditions and seeking higher pay.

Eskom’s spokesman Khulu Phasiwe told Reuters the workers received text messages asking them not to report to work.

That further enraged union .

“No worker will to work when 1,000 workers are fired. This will just make them stay away for longer,” said Steve Nhlapo, NUMSA’s head of collective bargaining.

“You can’t workers by text, there are procedures to follow and unions to consult.”

Medupi would be the first power station that has built in 20 years. Eskom has been implementing regular power cuts to cope with power shortages.