South Africa emerged last week from an ugly and protracted strike in the public sector, only to now face the prospect of strike action by the electricity supplier ESKOM. The supplier has admitted that it is low on reserves in the face of an unusually cold winter.

Citizens already are feeling battered by images of patients lying unattended in public hospitals, many of them terminally ill and vulnerable, and of pupils in public schools whose examinations at such a crucial time in their schooling were interrupted by the striking teachers. 2007 will truly be remembered bleakly as South Africa's "Winter of Discontent".

In my last newsletter, I said that in order to repair the damage done to South Africa's hard-won reputation for economic stability and to prevent a reoccurrence, the objective of our public service relations should be to bring the forces producing conflict towards constructive ends. I further said the right to strike must be carefully balanced with the rights of public sector clients. That's you and me. In the end, I concluded, the only sustainable way to raise wages is to improve our productivity and maintain competitiveness. I'll return to this in a moment.

First, I would like to emphasise that, broadly speaking, the IFP recognises that South Africa is a better place today for its workers than in 1994. From the point of view of labour, there have been great successes, such as the comprehensive labour legislation passed by parliament, amongst other things, entrenching the minimum wage, worker-friendly procedures, substantial labour rights and affirmative action.

These measures are, I believe, on the whole, socially progressive and are characteristics of a developmental state striving to achieve social justice for all, not just the few. My concerns, about labour legislation and affirmative active, particularly, have centred on the implementation rather than the principle.

Yet the Eskom dispute crystallises the conundrum of balancing the rights of workers to strike and the rights of citizens to receive basic services and, at the same time, maintain economic stability. The wage talks have stalled with the 6% offered. As Business Day pointed out this week, even hardened analysts have said that the utility is, in real terms, offering its workers a wage cut. This is hard to justify with a buoyant economy which is running a budget surplus.

The dismal state of affairs is exacerbated by the fact that Eskom is at the start of a massive capital expansion plan to increase generating capacity. This, I am sure, will be a great relief to the people of Cape Town, especially, who have suffered power-outs over the last year. Even 'Yours Truly' has experienced this first hand and has had to stock up on candles when I've been in the mother city for parliament! I cannot imagine how the millions of people living in the townships and rural areas across the country have coped with this hardship.

So Eskom needs the very same workers, who are contemplating industrial action, to increase their productivity to ramp up productivity. Furthermore, customers will, like the workers, be expected to foot the bill with higher tariffs.

As I said, a big part of the solution lies in improving productivity and competitiveness. In the case of the public utilities, like Eskom, this will mean that the government must accelerate privatisation to promote competition and efficiency, as well as attract private capital. The privatisation of public utilities will always be controversial because of their perceived natural monopoly status, and fears of discrimination against poor customers and the emergence of cartels.

Yet, I believe, if properly regulated, privatisation will benefit both consumers and workers in the long-run. Consumers basically want two things from their electricity supplier: reliability of service and affordable prices. By these criteria, electricity privatisation in Britain, for example, appears to have been a success. Since privatisation in 1990, reliability has been maintained and prices for ordinary consumers have fallen in real terms by about 25 percent.

More money in the customers pocket increases spending power to grow the economy and create more jobs. I do recognise, however, that privatisation of the public utilities is unpalatable because it does, usually, entail some job losses at least in the short-term. I am also sorry to say that the implementation of BEE with the creation of a black oligarchy, rather like the emergence of a new kleptocracy in Russia, has, by association, erroneously given economic liberalisation a bad name. COSATU has skilfully played this card in the public debate.

Returning directly to labour relations, the IFP recommends that, serious thought is given to the appointment of an independent advisory arbitrator(s) who will, hopefully, make pre-emptive proposals far quicker than the present process.

As for the strikers who disobeyed the law and breached the Labour Relations Act, I, on this occasion, suggest a measure of leniency and a measure of that generosity of spirit that South Africans are famed for. For what's its worth, I also think the government played an honest hand against a groundswell of public sympathy for striking teachers and nurses.

I never, of course, condone breaking the law or violence. But I fear reprisals will, at this point, detrimentally set labour relations back when we need to pull together. The strikes were a long time in the making and the air is heavy with recriminations. We will, instead, need to take some of the tough medicine that I have spoken of to protect the integrity of the LRA and prevent such strife in the future.

Yours sincerely,

Prince Mangosuthu Buthelezi MP