CASH-STRAPPED UTILITY
Eskom has no idea how it will fund wage increases
Eskom announced on Thursday morning that it has reached a three-year wage agreement with three trade unions
A three-year wage agreement signed between Eskom and recognised unions will cost the cash-strapped utility R3.9bn in total, Eskom has said, but there is no clear indication of how it will pay for the increases. The state-owned company cannot keep up with its debt repayments, let alone carry unexpected costs. Its precarious financial position poses a significant risk to the SA economy, given that the government has backed R350bn of its debt. Eskom announced on Thursday morning that it has reached a three-year wage agreement with three trade unions, and will adjust employee salaries 7.5% upwards in the current financial year and 7% upwards in each of the following two years. Housing allowances would also rise in line with inflation and a one-off cash payment of R10,000, after tax, would be distributed to employees. Eskom’s wage bill for the previous financial year was R29.5bn. Asked how it will pay for the increase, Eskom said: "We will have to tighten our belts even further as we wil...
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