R1.8bn is not for performance bonuses, Eskom tells Nersa
Eskom says it hasn’t paid performance bonuses for the past two years and the money is for standard 13th cheques
As Eskom and the country’s energy regulator prepare for a showdown in court next week, the cash-strapped utility has denied it plans to pay R1.8bn in performance bonuses to its employees.
The statement comes in response to a report by City Press, based on court papers filed by the National Energy Regulator of SA (Nersa) last week, in which it said Eskom was seeking the additional revenue to pay performance bonuses for work between 2019 and 2022.
The request comes despite Eskom’s poor performance as it slid into a record R20bn loss last year and implemented stage 6 load-shedding for the first time.
Eskom, which supplies virtually all SA’s power, is hamstrung by a R450bn debt and maintenance issues and design flaws at the Medupi and Kusile power stations. Ratings agencies have identified the state power utility as the single largest risk to the economy.
In her affidavit, Nomfundo Maseti, the acting, full-time member of Nersa for electricity, reportedly said these “incentive bonuses” were within the control of management and should only be allowed when Eskom returns to financial health.
In a statement released by Eskom on Tuesday, however, the utility said its application did not include performance bonuses but made provision for annual bonuses for the three-year period, which is equivalent to a 13th cheque and forms part of employees’ normal remuneration package.
“Nersa, in its decision, incorrectly disallowed these contractual costs and hence they do not form part of the allowed revenue granted to Eskom,” the utility said.
In keeping with a board decision reflecting the poor performance of the business, Eskom said no performance bonuses have been paid to employees in the past two years.
Eskom’s court bid to review the regulator’s fourth, multi-year price determination decision does not specifically tackle the R1.8bn for bonuses but broadly challenges the regulator’s decision to deduct a R69bn bailout Eskom received from the government when taking its tariff decision.
Eskom argues that by including the R69bn in its decision, Nersa has essentially cancelled out the benefit of the government’s assistance. Nersa, however, contends that Eskom needs to get a handle on its own inefficiencies and maladministration to regain its financial health.
The case will be heard in court on Wednesday next week.
Eskom, meanwhile, continues to struggle to meet power needs and failed to keep a promise that there would be no load shedding until January 15 when it re-instituted rotational power cuts on Saturday and Sunday.
On Tuesday morning, Eskom said plant breakdowns were at 13,694MW (more than a third of its 40,000MW nominal capacity), but that it expects no load-shedding despite a constrained and vulnerable system.