Solidarity union to agree wage deal with Eskom – source

South Africa’s Solidarity trade union will accept a three-year wage offer from state-run power utility Eskom that would see pay hikes of 7% this year followed by annual increases of 7 and 6.5%, a union source told Reuters on Tuesday.

Cash-strapped Eskom, which provides virtually all of South Africa’s power, initially said it could afford no increases, angering unions and triggering protests that led to a spate of rolling blackouts in Africa’s most industrialised economy.

Officials from Eskom and one of the two other unions involved in the wage talks, the National Union of Metalworkers of South Africa (Numsa), were not immediately available for comment.

An official from the National Union of Mineworkers (Num) said his union was yet to decide whether to accept Eskom’s wage offer. The trio of unions accounts for over half of Eskom’s workforce.

Eskom has two offers on the table, with the other being a 7.5% increase in the first year followed by 6.5 and 6.25% raises.

Repairing Eskom’s battered balance sheet is a major challenge for President Cyril Ramaphosa. Sources in the ruling African National Congress have said Eskom assets may be sold off but that would also likely face stiff opposition from unions.

Eskom is regularly cited as a threat to South Africa’s credit rating because it has more than R220 billion ($16.6 billion) of government-guaranteed debt.