JOHANNESBURG - South Africa's biggest union said on Tuesday 50,000 construction workers would launch a strike over pay from next Wednesday, halting work across the economy including on stadiums for the 2010 World Cup. A prolonged strike could cause the partial shut down of an economy in recession and could scare foreign investors.
Several sectors in Africa's biggest economy are holding wage negotiations, some of which cover a two-year period, and unions are demanding above-inflation increases.
Employers have balked at the demands, with consumer inflation at 8 percent, citing the global economic downturn.
As well as World Cup infrastructure, the construction strike could halt work on the mass transit Gautrain high-speed rail project, power stations, an airport, a refinery, a coal terminal, hospitals, highways and mining projects.
The National Union of Mineworkers (NUM), which also represents construction workers, said in a statement it had served the construction sector's employer body with a notice to go on strike after prolonged wage talks collapsed last Friday.
"A strike action is set to begin on July 8," Lesiba Seshoka, the NUM's spokesman said.
"Its not just the World Cup stadia that will be affected, we are talking about power stations, hospitals, roads and the like. It will last until they (the employers) come to their senses and offer a 13 percent wage increase for one year."
The NUM said it had lowered its wage demand to 13 percent for a one year agreement whilst employers had offered a 10 percent increment for the first year.
The employers' organisation was not available to comment.
Over the past two weeks, South Africa has staged the Confederations Cup, a test event for the World Cup, which whetted the appetite for the main event, but a lot of work was still pending, including completing building works on stadiums.
FIFA president Sepp Blatter gave organisers of the Confederations Cup a mark of 7.5 points out of 10 on Monday.
There was no immediate comment from the government on the possibility of a strike, but earlier on Tuesday it said the success of the tournament had put to rest all doubts that South Africa would deliver a successful 2010 FIFA World Cup.
In a statement, it said the stadiums used for the Confederations Cup had met all the requirements, while five others would be completed soon.
"Government remains committed to delivering on all the guarantees for the 2010 FIFA World Cup. The other remaining stadiums ... are nearing completion," it said.
The union said many companies would be hit if the strike went ahead.
Seshoka said Africa's top construction and engineering firm Murray & Roberts Holdings Ltd, WBHO and Group Five could have their work affected.
South Africa's state-owned utility Eskom's 4,800 megawatt Medupi power station could also be affected, slowing efforts to fill a chronic power shortage in the country.
Expansion work on the coal export facility, Richards Bay Coal Terminal could be delayed further, the union said.