Uncategorized 6.9.2015 04:03 pm

DA lambasts Eskom for top executives’ R50m salaries

Eskom CEO Brian Molefe. Picture: Neil McCartney

Eskom CEO Brian Molefe. Picture: Neil McCartney

The Democratic Alliance (DA) on Sunday lambasted Eskom for spending R50 million on executive salaries in 2014/15.

Eskom’s 2015 integrated report on its financial performance for the 2014/15 financial year showed clearly that the parastatal was in a financial crisis, with revenue having fallen from R7 billion to R3 billion during the period under review, DA spokeswoman Natasha Mazzone said in a statement.

The report also revealed that fruitless and wasteful spending amounted to R51 million, and the entity had a high failure rate in terms of performance targets met.

“Yet, Eskom still spent an exorbitant R50 million on executive salaries over this period – with an additional R10.8 million being paid out for long-term incentive bonuses. This amounts to R1.4 million per executive member.

“The current executives at the helm of this failing entity are performing dismally. It is extremely unjustifiable that they are receiving these exorbitant pay checks and bonuses,” she said.

The DA would ask public enterprises portfolio committee chair Dipuo Letsatsi-Duba to have Public Enterprises Minister Lynne Brown and Deputy President Cyril Ramaphosa, who chairs government’s energy “war room”, appear before the committee to give a full explanation for the dramatic decline in income and massive increase in costs.

“It is they who must take full responsibility for the poor management at Eskom.”

Brown should also explain to the committee why these unacceptably high salaries remained in place, and what she was going to do to decrease them to a more appropriate level in future, she said.

According to the report, group’s net profit after tax declined from R7.1 billion in 2014 to R3.6 billion in 2015, with Eskom putting this down to increased use of open cycle gas turbines and subsequent fuel costs incurred for diesel to power these turbines.

Of the 37 performance targets, Eskom met only 51 percent. Of the targets not met, the most significant were:
– energy availability factor: target 80 percent, actual 73.73 percent;
– generation capacity installed and commissioned: target 433 MW, actual 100 MW;
– interest cover: target 0.69, actual 0.44;
– debt/equity: target 2.48, actual 2.70;
– free funds from operations as a percentage of gross debt: target 7.63 percent, actual 2.37 percent;
– outstanding maintenance backlog: target one, actual two; and
– unplanned capability loss factor: target <10 percent, actual 14.22 percent.

In November last year, the DA called on Brown to freeze bonuses for Eskom executives until performance at the parastatal improved.

“In March this year, we called for an end in large bonuses to Eskom executives, and to repay them.

“It is now high time this matter is addressed. The current energy crisis has caused economic growth to grind to a halt, leaving unemployed South Africans very little hope of finding work,” Mazzone said.

 

 

 

 

 

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