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NUMSA condemns NERSA for granting Eskom a tariff increase

By Irvin Jim - NUMSA, December 18, 2017

The National Union of Metalworkers of South Africa condemns the National Energy Regulator of South Africa (NERSA) for granting Eskom a 5.2% tariff increase. Last month NUMSA and the United Front participated in public consultations on Eskom’s request for a 19.9% price increase in the 2018/2019 financial year, where we rejected the request. Below are five reasons why NUMSA rejects any increase in the cost of electricity:

  1. NUMSA is dismayed by NERSA’s decision to grant Eskom an above inflation 5.2% price increase. By doing so the energy regulator is demonstrating it does not act in the interests of the working class majority and the public in general. Most companies big and small simply cannot afford it. The tariff hike is likely to result in plant closures which will lead to more job losses and stifle growth in the economy.
  2. For the working class, access to electricity, like water, is a human right and therefore we demand free electricity for the working class and the poor, and affordable electricity for industry. The working class majority and the poor cannot afford to pay and the state should not commodify this basic human necessity.
  3. Eskom is poorly led and its senior management team is drowning in scandals. The management team has shown that it cannot be trusted to clean up the power utility. The outcome of the disciplinary hearing of Matshela Koko, the suspended acting CEO shows proves this. Koko was disciplined for failing to declare a conflict of interest regarding his step-daughters ownership of shares in a company which was awarded more than a billion rand in contracts by an Eskom division which he led. He was cleared of all charges and the chairperson has reinstated him. This is despite the fact that the hearings have been discredited because of allegations of board interference, and threats of intimidation.
  4. Furthermore in a period of just two years Eskom has had three CEO’s. It’s CFO has been suspended under a cloud of corruption and mismanagement.  Clearly the participation of private companies such as KPMG, Mackenzie and Trillian in the looting of Eskom resources, and the undue influence of the Gupta family in allegations of state capture, is a clear indication that paying more for electricity means endorsing this blatant theft of our country’s resources.
  5. NERSA has demonstrated that it is completely oblivious to the suffering of the working class majority. StatsSA has confirmed that more than half the population lives in abject poverty; more than 36% of the working population is unemployed and the gap between the rich and poor is ever widening. To make matters worse the economy is in junk status and growth prospects are very low. The majority of the working class cannot afford to pay for electricity. Therefore an above inflation increase of 5.2% will compound all these problems and increase the chances of a violent explosion in the country.

NUMSA together with the United Front will be holding regular demonstrations and pickets across the country next year to highlight these issues. What we need is free, safe and accessible energy for the working class and the poor. We reject any price increase because it will put electricity out of economic reach of the majority of people in the country.

The Invisibility of Poverty in Puerto Rico

By Oscar Oliver-Didier - CounterPunch, December 11, 2017

It has been more than two months since Hurricane María, a catastrophic category four hurricane, took a heavy toll on Puerto Rico’s infrastructure and dismally affected its local residents. People in the mainland saw pictures and videos of entire communities being physically disconnected due to bridges collapsing and roads being covered with debris. The news cycle kept repeating how extremely difficult it was to send rescue teams and aid to these heavily hit areas. And it is pretty common to know by now that any form of communication was basically inexistent—due to cellphone towers being torn down by strong winds—and that 100 percent of users were left without electricity right after the storm. Although some improvements have occurred, to this date, not much has changed. Only a little over half of the island has recovered electrical power—mostly intermittently.

Even though it has lost its persistent media coverage, what this dire aftermath and the subsequent relief and recovery effort have revealed is the island’s century-old unequal colonial relationship with the United States, and the local elites’ role in sustaining it. Recent controversy over the mishandling of the humanitarian crisis after Hurricane María should not surprise anyone. In the territory, as subaltern subjects, Puerto Ricans have been continuously subjected to a capitalist and racial hierarchical system.

These unjust core-periphery relations are a still evolving colonial condition that has made the territory a contested realm for economic extraction and injustices since the U.S. invaded the island in 1898. In fact, there is a similar case that dates back to an 1899 hurricane that devastated Puerto Rico called San Ciriaco—after which the U.S. quickly moved to devalue the local currency, raise property taxes, and put in place a corporate takeover of land that unleashed the sugarcane economic boom of this period.

As multiple recent news articles have highlighted, it has also laid bare the extreme inequality and conditions of poverty present throughout the U.S territory. Even the politically vocal Mayor of San Juan, Carmen Yulín Cruz pronounced recently in an interview that: “We will no longer be able to hide our poverty and our inequality with palm trees and piña coladas.”

It is important to note, however, that Puerto Rico has had a long history of obscuring poverty—especially after the Operation Bootstrap program was implemented in the island during the mid-twentieth century. This expedited modernization project was to become the Cold War’s antithesis to communist Cuba. Deemed a beacon for freedom and a laboratory for democracy in Latin America, huge amounts of federal money were transferred from the mainland to the territory in order to showcase Puerto Rico as capitalism’s success story.

However, this process of modernization was not working hand in hand with a long-term economic project that would actually lift most islanders out of poverty—today, more than 40 percent of residents live under the federal poverty line. By the 1970s, the economy started a downturn, so in 1976 Section 936 of the U.S. tax code was created to grant mainland corporations a tax exemption from their incomes originating from its Puerto Rico subsidiaries. Without a strong local economy—just a huge profit increase for mainland companies—when the tax exemption finally expired in 2006, Puerto Rico was left in economic shambles and has not recovered since.

Remake Puerto Rico’s power grid and create a universal basic income

By Elsie Bryant  - Climate Change News, December 6, 2017

Hurricane Maria, which made landfall at the end of September, left the island of Puerto Rico without energy, as more than three-quarters of its energy infrastructure was lost to the storm.

As Puerto Ricans sought help in restoring power to the people, for green energy enthusiasts, the destruction of Hurricane Maria was an opportunity to rethink – not just rebuild – Puerto Rico’s energy infrastructure by going off-grid with solar energy.

Puerto Rico has a once in a lifetime opportunity to rethink how it gets electricity”, wrote Earther journalist, Brian Kahn; “Solar industry wants to build Puerto Rico’s grid of the future” was the Bloomberg headline. Even the energy and environment minister for the Maldives, Thoriq Ibrahim, weighed in: “Puerto Rico hurricane shows islands must have renewable energy,” he wrote. Elon Musk has been one of the more prominent players in the space, with his company Tesla offering solar systems and batteries.

While any move away from fossil fuels is welcome, we need to think bigger about what resilience could mean for Puerto Rico. There’s an even larger opportunity here to transform Puerto Rico, where before the natural disaster happened, an economic and social crisis has been playing out for nearly a decade.

Puerto Rico’s economy has been in recession for over 10 years, the population is in drastic decline and the household income is less than half of what it is in the poorest US state. All the while, the island’s debt burden continues to grow, making private firms very rich. A resilient Puerto Rico needs not just a new grid but a new economic system, one that is localised and community driven, with Puerto Ricans owning and managing those resources.

This is not a vision that Puerto Ricans are waiting for the wider world to bring to them. Ángel Figueroa Jaramillo, head of Utier, the electrical workers’ union in Puerto Rico, told reporters “solar power and wind power in Puerto Rico is really the key to the future of the island’s energy independence”, adding that “all the alternatives have to be owned by the community”.

The benefits of community ownership are clear when the evidence shows that some of the most resilient communities following the hurricane were cooperatives such as the Cooperativa de Vivienda Ciudad Universitaria. The co-op is a community of over 1000 people, who as the Orlando Sentinel reported, “learned to formalise the neighbour-to-neighbour mentality so well that in situations of crisis – such as this one – they don’t have to wait for the government to show up or feel the need to flee”.

Thinking even more radically, the gains of a commons-based solar network, could be extended by advocating that dividends from any energy sold back to the grid could be redistributed to every Puerto Rican as a basic income.

NUMSA and United Front Joint Memorandum on the Eskom tariff increase

By Irvin Jim, Trevor Ngwane, and Lindiwe Malindi - NUMSA, December 1, 2017

The National Union of Metal Workers (NUMSA) and the UNITED FRONT (UF) are extremely dismayed by the opportunistic call made by the Eskom board and its management to increase the electricity tariff by 19.9%. We view this demand by Eskom as nothing more than a gross abuse of power, and an attempt by the State Owned Entity (SOE) to hold the entire country and the economy hostage. This is being done by an entity which has been moving from one scandal to another with absolutely no leadership. In fact, it is extremely shocking that in a period of just two years, Eskom has changed CEO’s three times, and its CFO, Anoj Singh, has been suspended under a cloud of corruption and mismanagement allegations. But the same company and its board have the audacity to make an outrageous demand for a 19.9% tariff increase. They have no regard for the catastrophic implications which will trigger a national crisis of plant closures of small, medium and large companies; as well as causing retrenchments in all big companies. It will in fact destroy all opportunities to stimulate real economic growth and jobs.

Socio-Economic Situation

NUMSA and the UF are of the view that the economy has been in a technical recession for several months which means the working class of this country are facing a job-loss blood bath across all sectors. Currently more than 36% of the working population is unemployed, and the numbers are increasing. More than 30.4 million of the population lives in abject poverty; the average worker supports at least 5 dependents on his/her meagre income, and at least 26 million South Africans go to bed hungry. Any change in the price of electricity will compound all these problems and increase the chances of a violent explosion in the country.

It is against this backdrop that NUMSA and the United Front reject Eskom’s outrageous demand for a 19.9% tariff increase. The Eskom board are clearly completely deaf and blind to the suffering of the working class because they decided to make this proposal in spite of the fact that there is glaring evidence that the working class majority simply cannot afford an increase in the electricity rate. The United Front and NUMSA have decided to hold this demonstration to express our anger with Eskom for wanting to increase the suffering of the working class, by requesting a tariff increase.

Hamilton transit in the Age of Austerity

By Blake McCall and Caitlin Craven - Rank and File, November 29, 2017

Editor’s introduction: This is the second half a two-part series on how austerity has damaged public transit. In this article Blake McCall, a Hamilton bus operator and ATU Local 107 member, and Caitlin Craven, a CUPW Local 548 and local Fight for $15 and Fairness organizer, examine how decades of underfunding has undermined Hamilton’s transit system, the HSR.

Like all transit systems in the province, the HSR was the victim of city budget cuts in the 1990s stemming from provincial cuts under Premier Mike Harris and others.  A startling statistic is that the total number of buses on the street was higher in the 1980s than it is now, despite the city having grown in size. This unsurprisingly has seen a drop in ridership from 29 million trips per year in the late 1980s to roughly 22 million trips per year today.  In recent years the city has started to put more money back into the system, but it has never recovered from these cuts.

Survival on the island of the portable generator

By Judith Lavoie - Socialist Worker, November 28, 2017

IT IS now more than two months after Hurricane Maria struck, and Puerto Rican society is completely reliant on portable electrical generators.

Businesses and services that we thought were back to normal frequently have to close up shop because their generators break down or are in need of maintenance or repair. Everywhere you go, almost all the businesses that are open are only open part time--and even these have to open and close depending on when electricity is available to them.

Doctors have to postpone critical medical services such as CT scans because some generators simply can't sustain the machines.

These days, when we make any kind of plans, they are always tentative, because an unexpected power outage can quickly force us to cancel. These power outages can happen because of yet another failure in the electrical grid or because someone's generator has failed--yet again.

The government insists that 50 percent of homes have had electrical services re-established. They arrive at this percentage by taking the total amount of electricity being generated and estimating the number of homes served based on the island's maximum electrical load.

"This isn't the way it is done," said Matthew Cordaro, a trustee of the Long Island (N.Y.) Power Authority, told El Nuevo Dia. "The first thing you have to do is figure out how many of the distribution lines reach customers and how many have been re-established...What electricity is being generated and sent to the network is not actually being tracked. Instead of this, chaos reigns."

At the beginning of November, in the midst of the controversy about how they calculated the number of homes connected to the grid, the U.S. Department of Energy stopped counting the number of homes without electric service in Puerto Rico altogether.

We saw Puerto Rico's struggle to survive

By Monique Dols and Lance Selfa - Socialist Worker, November 20, 2017

ALMOST TWO months after Hurricane Maria struck Puerto Rico, the island is adjusting to a new reality.

As one activist we met put it, Hurricane Maria ripped the leaves off the trees--and also ripped away the thin veil that barely concealed widespread poverty and immiseration.

The first few weeks after the storm were a period in which people worked just to ensure the safety of their families, comrades and loved ones, using alternative methods of communication to reach people in different areas. With very little support from the government, people pooled their resources to clean out their homes and try to salvage what was salvageable.

As of mid-November, about two-thirds of the island's residents remained without electricity. Although authorities are promising to restore power to 95 percent of residents by mid-December, attempts to repair the electrical grid have already run into many problems and breakdowns.

As a result, many people must rely on power generators for electricity, polluting the air with sound and exhaust. Without reliable electricity, people struggle to preserve and cook food, clean their clothing and keep desperately needed medicine such as insulin.

While 75 percent of the island reportedly had running water as this article was being written, people still line up for hours for bottled water--because it's suspected that water from the tap isn't safe to drink in the wake of the storm. In the Rio Piedras area of San Juan, the tap water ran blue as it flowed from faucets, according to residents.

Shortages of certain products roll through at different moments, creating spikes in prices. For example, right before we arrived, there was a shortage of mosquito repellant, which is now a necessity on the island.

The informal death toll is now around 900, but is likely more since communication is still spotty, reporting is low, and the medical system is still in a state of crisis.

Yet despite this latter crisis, the U.S. Navy medical ship, the USS Comfort--which, when we were there, was anchored in San Juan's port where cruise ships usually dock--is woefully underserving the sick people of Puerto Rico.

With doctors at Centro Médico in San Juan, the main hospital for the island, still operating by flashlight at times, many people wanted to know what you had to do to get admitted to the USS Comfort. The authorities had set up a couple of tents on the promenade next to the dock, and we saw dozens of people--some with walkers or oxygen tanks--lining up in the sweltering heat, presumably seeking treatment.

The common understanding on the island is that the local and federal governments have completely abandoned ordinary Puerto Ricans.

How corporate thieves prey on Puerto Rico

By Christopher Baum - Socialist Worker, November 17, 2017

ALMOST TWO months after Hurricane Maria struck Puerto Rico, more than 750,000 Puerto Rican homes and businesses remain without electricity.

Yet political and business elites in the U.S. and on the island itself seem more interested in continuing the project of turning Puerto Rico into a cash machine for private companies than in giving the Puerto Rican people the aid they desperately need.

In the weeks following the hurricane, the Puerto Rico Electric Power Authority (PREPA) signed two highly dubious contracts with private U.S. firms to help with the rebuilding of the island's utilities infrastructure.

The more notorious of the two deals was a $300 million contract with a little-known Montana company called Whitefish Energy, which at the time Maria struck had only two permanent employees--and no experience on any projects even remotely approaching the scale of rebuilding Puerto Rico's power infrastructure.

In fact, as a two-year-old company, Whitefish could claim very little experience of any kind. What they did have going for them, apparently, was ties to the Trump administration's Interior Secretary Ryan Zinke.

This deal was so suspicious that even many congressional Republicans cried foul. In the face of enormous public and political pressure, Puerto Rico Gov. Ricardo Rosselló announced on October 29 that he had instructed PREPA to cancel the Whitefish contract.

The deal still works out pretty well for Whitefish, however. As the New York Times reported, the company will continue to do repair work on the island through November 30.

The contract permits Whitefish to bill PREPA $319 an hour for each worker--of which the workers themselves, according to the Times, will receive between $42 and $100 an hour.

Whitefish is also authorized to charge $412 per worker per day for food and lodging, along with similarly exorbitant rates for equipment and transportation. As the Times notes, all of these figures as far above the norm, even for emergency work in remote areas.

And to top it all off, millions of Puerto Ricans who had their power restored were plunged into darkness again when a high-voltage transmission line supposedly repaired by Whitefish failed again.

NUMSA’s Submission to NERSA on Eskom’s Application for a tariff increase

By Irvin Jim - NUMSA, November 15, 2017

NUMSA is a manufacturing union and since 2009, the union has witnessed the deep global crisis of capitalism in the manufacturing sector. NUMSA has witnessed hemorrhaging of jobs, plant closures retrenchments the downward variation of conditions and benefits of workers and the casualization of labour. At the centre of this crisis, especially in small, medium-sized companies has been the uncompetitive Eskom electricity tariffs.

The history of job losses can be traced to wrong the ANC government neo-liberal policies such as liberalization of trade, removal of exchange controls, continuous and the maintenance of high interest rates by the Reserve Bank. This situation was worsened the day government made the decision to move Eskom away from its core mandate which was to supply cheap electricity to the economy in order to grow the economy, to electrify communities and to create jobs. This mandate was replaced by a backward government and NERSA with the decision to prioritize their balance sheet, which was nothing more than to chase profits.

NUMSA has consistently called for the nationalization of all commanding heights of the economy and all our minerals. In the case of Eskom, we have consistently made a call that government must nationalize the strategic coal mines that must supply the national grid with cheap quality coal, so that we can escape the continuous exorbitant prices of primary coal, and deliver a competitive electricity tariff. If one were to look at the exorbitant primary coal tariff increases from 2007 to 2016, they are indeed shocking and appear to be a money-making scheme which is not in line with the original mandate of Eskom.

Viewpoint: A Union Plan for Hurricane Repair: Local Hire, Prevailing Wage

By Gordon Lafer - Labor Notes, November 1, 2017

After Harvey, Irma, and Maria, many thousands of homes have been lost and lives wrecked. People in Texas, Florida, and Puerto Rico need decent paying jobs while they try to put their lives back together, and the one industry that will be booming is construction.

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