Eskom's culture of awarding poor performance


Pretoria – The National Energy Regulator of South Africa (Nersa) turned down Eskom’s latest application for a 25% rate increase due to insufficient information and a “lack of transparency on Eskom’s finances”.


July 1 st, 2015

Eskom reportedly says it’s not “bluffing” or “blackmailing” the public with warnings that it cannot afford to by more diesel without the 25% tariff increase. President Zuma promised Eskom a R23bn boost during his State of the Nation Address. Eskom is said to re-apply for the tariff hike which, according to Nersa, will only be affected in the 2016/2017 financial year.

While Eskom makes promises “to do whatever it takes not to harm SA’s economy”, according to Eskom’s Acting CEO Brian Molofe, Molofe was quoted in April 2015 saying that Eskom’s bonuses are “pre-determined” and if he were still in the job at the time, he would “not expect anything extraordinary” like the other executives at Eskom. Bonuses would be in line with the policies of Eskom “and nothing over and above the policies of Eskom”. Which policies?

The ten management executives at Eskom received a collective R57m bonus payout for the 2013 financial year, which apparently included the termination payment of R15m for former CEO Brian Dames. Some of the executives who were awarded bonuses are now on suspension, according to reports. In the 2014 financial year, Eskom paid its nine executives R60m. R24.4m was paid to the CEO, the financial director, and the operations director for dumping SA in the worst energy crisis ever.

In 2014 Eskom was well aware of the looming crisis. Despite the obvious crisis, Eskom continued to increase former CEO Brian Dames’ salary and bonus from R.142m in 2005 to nearly R10m in 2013/2014 when he retired. Finance Director Tsholofelo Molefe at the time said Dames “was entitled” to the increase.

Eskom’s executives are clearly failing SA yet they are continually being awarded pay hikes at the expense of the consumer. Eskom is becoming notorious for rewarding poor performance with its motto of: “We are taking things…one day at a time, so no guarantees for tomorrow”. The only guarantees are more pay hikes for incompetent executives and more tariff hikes for over-burdened consumers. 

Silos have been showing signs of stress for months already while Eskom does nothing to correct the problem, except to warn consumers that the collapses could cause “rolling blackouts across the country”. 

“One day at a time” is not good enough, Eskom.


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