The South African Federation of Trade Unions (SAFTU) strongly condemns Eskom’s announcement that it plans to install half a million smart meters by March 2026, despite only having 278 000 in stock. This plan is yet another anti-poor, revenue-driven policy that exposes Eskom’s growing obsession with collection over service, punishment over solidarity, and profits over people.
Punishing the Poor for a Crisis They Did Not Create
This scheme is the latest in a long line of measures that make the working class shoulder a crisis created by corruption, looting, maladministration, and inflated tenders engineered by politically connected elites. Eskom was not bankrupted by workers or poor households but by those who captured and hollowed out the utility for personal enrichment. Yet, it is the poor who now pay the price.
For years, workers have been forced to subsidise corporate giants that consume most of Eskom’s power. The Energy Intensive Users Group (EIUG) only 27 companies uses roughly 42% of Eskom’s total output but pays a fraction of what households are charged. Estimates show EIUG members pay as little as one-eighth of the price per kilowatt-hour that working-class families pay. Their usual excuse is that they “create jobs,” yet even the EIUG admits that its members collectively contribute a mere 4% of total employment.
Recent retrenchments by Glencore, ArcelorMittal, Sibanye-Stillwater and others expose the lie that these corporations deserve subsidies. They destroy jobs while exporting profits, dodging taxes, and exploiting transfer pricing bleeding our economy dry while communities collapse around them.
Smart Meters: Tools of Disconnection, Not Modernisation
Against this background, Eskom’s “smart meter” rollout is not about efficiency but control and exclusion.
These meters enable automatic disconnections and prepaid enforcement, cutting households off from electricity the most basic necessity the moment their credit runs out.
Over the last 15 years, tariffs have risen by over 500%, while wages have stagnated and unemployment has soared to 43%. Millions of households already choose between food and electricity, while municipalities pile on further surcharges. The City of Johannesburg, for example, adds a 6.7% surcharge on top of a R230 levy.
These devices will deepen energy poverty, expand the darkness in working-class homes, and accelerate the creation of a dual energy society one for the rich with solar panels and private supply, and another for the poor with candles and hunger.
Vulindlela, GAIN, and the Neoliberal Capture of Energy Policy
This entire strategy forms part of a broader neoliberal blueprint advanced through Operation Vulindlela and the GAIN (Growth for Acceleration and Inclusion Network) initiative, both championed by the Presidency and National Treasury.
Under the pretext of “modernising the economy” and “crowding in private investment,” these programmes in fact shift the risk of private investment onto the public. They use public guarantees, infrastructure, and subsidies to secure private profits while forcing working-class consumers to pay escalating tariffs.
The Independent Power Producers (IPPs) are the sharp edge of this agenda. Their contracts guarantee profits for private companies through high, inflation-busting tariff rates, effectively socialising risk while privatising reward.
IPPs: The Hidden Hand Behind Rising Tariffs
Eskom’s own tariff applications to NERSA reveal that IPP pricing often well above inflation has become a major driver of costs. By April 2023, IPP tariffs accounted for almost one-third of the total tariff increase.
Government policies like the Electricity Regulation Amendment Bill which SAFTU opposed in Parliament in March 2024 accelerate this privatisation drive. The Bill establishes a Transmission System Market Operator and a Central Purchasing Agency, opening the door for private producers to dominate power generation and sales.
Eskom’s submission to the Presidential Climate Commission confirms that IPPs are expected to produce 66% of South Africa’s electricity by 2035, effectively dismantling public ownership and replacing it with a market captured by private profiteers.
These IPP contracts are long-term, secretive, and cripplingly expensive. They drain Eskom’s finances, deepen its dependence on private capital, and shift costs onto consumers. The public has a right to know the terms of these deals.
Reversing the Gains of Electrification and Development
For many black working-class communities, access to electricity was once a celebrated achievement a tangible symbol of freedom and progress. Today, those same communities are being pushed back into the dark ages. The very people who once achieved near-universal electrification are now being forced once again to be “hewers of wood and drawers of water.”
This regression not only reverses the Millennium Development Goals, but exposes millions to unsafe, high-carbon energy sources such as paraffin, coal, and firewood fuels that increase indoor pollution and shorten life expectancy. The government’s so-called “energy transition” is therefore not a transition to sustainability but a transition to inequality and early death for the poor.
Anticipating the Counter-Attack: “SAFTU Encourages Non-Payment”
We anticipate accusations that SAFTU is promoting non-payment. Let us be clear: refusing to be exploited is not defiance it is justice. When tariffs have risen by over 500% while wages stagnate and unemployment stands at 43%, this is not a “culture of non-payment” but a revolt against structural injustice.
The real solution lies in cross-subsidisation, expanded free basic services, and declaring the unemployed indigent so that the burden of Eskom’s crisis is not placed on those who did not create it.
Cross-Subsidisation and Free Basic Services
SAFTU demands a fundamental restructuring of South Africa’s utility pricing system:
- Cross-subsidisation must be strengthened so that high-income users and large industrial consumers pay proportionately more.
- The Free Basic Electricity (FBE) allocation, currently only about 50 kWh per month for indigent households must be increased to at least 100 kWh per month, with a plan to expand further.
- Free Basic Water and sanitation allocations must likewise be increased and protected from municipal surcharges.
- Automatic disconnections for households that have exhausted their free units or prepaid credit must be prohibited.
Indigent Status: Protecting the Poor Across All Basic Services
The government still pays a R370 per month Social Relief of Distress (SRD) grant, introduced during the Covid-19 pandemic. SAFTU has consistently demanded that this be converted into a universal Basic Income Grant (BIG) of R1 500 per month.
Until that is achieved, all 12.6 million unemployed people including the 8–9 million SRD recipients must be formally declared indigent for all basic services.
This indigent status must extend not only to electricity, but also to water, sanitation, refuse removal, and all municipal levies. To demand that these households pay upfront for electricity and water through smart meters and prepaid systems is a frontal attack on the poor. It criminalises poverty and undermines constitutional rights to basic services, forcing the poor back into unsafe and carbon-heavy living conditions that reverse developmental progress.
Structural Review and Restoration of Public Service
SAFTU calls for a full review of Eskom’s structure and mandate, including:
- Reversal of the over 500% tariff hikes imposed over the past 15 years;
- Restoration of Eskom as a publicly owned, well-managed utility providing affordable, reliable electricity.
- Audit of Eskom’s cost structure and procurement to expose inflated contracts and eliminate profiteering; and
- A clear plan to rebuild Eskom’s capacity for public generation and distribution rather than privatised outsourcing.
SAFTU’s Key Demands
- Immediate tariff relief: Reverse unaffordable increases and implement progressive cross-subsidisation.
- Expand Free Basic Services: Guarantee at least 100 kWh/month of electricity and increased Free Basic Water and sanitation allocations for all indigent households.
- Universal Indigent Declaration: Recognise all 12.6 million unemployed, including 8–9 million SRD grant recipients, as indigent for electricity, water, sanitation, and municipal levies.
- Transition to a Living Basic Income: Use the R370 SRD as a foundation for a universal R1 500/month Basic Income Grant.
- Cancel the Smart Meter Rollout: End the system that enforces upfront payment and automatic disconnections for poor households.
- Transparency and Accountability: Publish all IPP contracts and terminate those that guarantee private profits through unaffordable tariffs.
- Policy Reset: Suspend Operation Vulindlela and GAIN reforms that shift private investment risk onto the public.
- Worker-Led Energy Transition: Build a worker-controlled, publicly owned renewable energy programme to deliver sustainable, affordable power for all.
People Before Profits
Eskom’s crisis will not be solved by punishing the poor or rewarding private profiteers. South Africa needs an energy transition led by workers, for workers, anchored in public ownership, transparency, and social justice.
SAFTU reaffirms that electricity, water, and basic services are human rights, not commodities. The federation will continue to mobilise workers, communities, and social movements to demand a truly public, democratic energy future that puts people before profit.
A statement was issued on behalf of SAFTU General Secretary Zwelinzima Vavi
For more details contact the National Spokesperson at:
Newton Masuku at:
0661682157
