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

Fri Mar 27, 2015 10:07am EDT
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By Peroshni Govender

JOHANNESBURG (Reuters) - South African utility Eskom [ESCJ.UL] fired 1,000 workers at a power plant on Friday and its chief 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 on.

A union threatened a new walkout after the workers were told of their dismissal via text message. They had been accused of 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 of his fellow executives this month while an inquiry is held into the operations of the troubled utility.

A labor 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 labor 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 up with demand.   Continued...

Workers walk past the construction site of Medupi power station in Lephalele April 11, 2013.  REUTERS/Siphiwe Sibeko