City Press 05 January 2020

Eskom wants taxpayers to cough up a further R1.8 billion for performance bonuses, despite the power utility’s well-documented inability to keep the lights on.

This startling allegation was laid bare in court papers filed by the National Energy Regulator of SA (Nersa) and follows rolling blackouts that were imposed by the debt-ridden, state-owned power utility last month.

At present levels, South Africa would have been at stage four load shedding this weekend if it weren’t for the fact that most industries have yet to resume operations this year. And this weekend, Eskom implemented stage two load shedding – due to an unanticipated conveyor belt failure at Medupi Power Station.

Nersa is preparing for a court battle against Eskom next week, in which Eskom will try to squeeze an additional R69 billion out of consumers.

In the court papers, filed by Nersa last week, Nomfundo Maseti, the acting full-time member of Nersa for electricity, does not mince her words about the public having to pay for the incompetence and maladministration at Eskom.

She cites the bonuses as an example, and said that it “came to Nersa’s attention” that Eskom plans to pay bonuses totalling R1.8 billion between last year and 2022.

These plans were not revealed in the version of Eskom’s tariff application, which was published for public comment.

Nersa refused to allow additional tariff increases for the payment of bonuses, but Eskom is challenging Nersa’s decisions in court.

Maseti said in her affidavit that the planned bonuses were “within the control of management” and should not be allowed at a time when Eskom was financially unstable.

But this requirement has not stopped Eskom from richly rewarding its employees in “performance bonuses” in the past.

City Press’ sister publication Rapport previously reported that Eskom paid bonuses of R4.2 billion in 2017.

If these bonuses were distributed equally among all 47 658 Eskom employees, each would have received about R88 000.

This was despite Eskom’s qualified audit and widespread problems at the power utility.

In 2016, performance bonuses of R2.1 billion were paid.

Last year, Eskom supposedly did not pay performance bonuses, but, after strike action, it agreed to pay more than 30 000 workers a “once-off payment” of R10 000 after tax.

This was over and above the wage increases of 7.5% a year for three years.

According to Eskom’s annual report, short-term bonuses were available to all of its personnel and could amount to between 35% and 42% of their salary package.

Eskom, however, sets goals the company had to achieve before anyone can be paid a bonus. At present, one of the goals is a R500 million net profit to fund the bonus pool.

Managers, on the other hand, could double their annual salary with short- and long-term bonuses.

Since 2017, no long-term bonuses have been awarded, and the board of directors last year vetoed the payment of 2016’s awards.

Last year, Eskom posted a loss of R20 billion and similar figures are expected this year.

The urgent application to be heard in court on Wednesday relates to the R69 billion bailout that government gave Eskom last February.

Nersa deducted this amount from Eskom’s approved income, therefore, according to Eskom, effectively negated the lifeline.

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