Eskom says it has not applied to Nersa to pay R1.8bn in bonuses

In a statement on Tuesday, Eskom said it had not applied to the National Energy Regulator of South Africa (Nersa) for R1.8 billion to pay performance bonuses, dismissing a report in a Sunday newspaper.

Reports at the weekend revealed that Nersa had filed court papers opposing an application by the state-owned utility to force Nersa to allow tariff hikes to the tune of R69 billion.

The regulator told the court Eskom planned on spending R1.8 billion on performance bonuses between last year and 2022.

On Tuesday, the power utility said: “The MYPD4 application made by Eskom for the three-year period did not include any allocation for performance bonuses. The application included a provision for an annual bonus for the three-year period, which is equivalent to a 13th cheque which forms part of the Eskom basic conditions of service and cost to company – ie employees’ normal remuneration package.

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“For those employees for whom a 13th cheque is not part of their conditions of service – ie non-union employees – an option is given to structure their package to provide for a 13th cheque without increasing their overall compensation. In keeping with a board decision reflecting the poor performance of the business, no performance bonuses have been paid to employees in the past two years.

“Nersa in its decision incorrectly disallowed these contractual costs, hence they do not form part of the allowed revenue granted to Eskom.”

The power utility said it has lodged a court application to review Nersa’s fourth multiyear price determination (MYPD4) decision to deduct the R69 billion that government has provided to it as shareholder support.

“The court application does not include any other aspects of the MYPD4 decision. This case will be heard in court next week.”

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