Half a million rand for every Eskom employee

Despite its cash flow crisis, Eskom is paying its more than 46,000 employees an average salary of half a million rand each.

In its full year report for 2014, Eskom listed employee costs totalling R25.62 billion rand.

Averaged among its 46,000-plus employees (as of September 2013), this equates to just shy of R550,000 per person.

The number includes all payments, including medical and post-employment benefits, leave, bonuses, pension bonuses and direct costs to the company.

On base salaries, Eskom spent R17.37 billion on staff, which equates to an average of R372,500 each.

Staff were paid a further R1.6 billion in overtime for the year, and R2.4 billion in bonuses.

Eskom salaries
Eskom salaries

According to documents handed to the National Energy Regulator of South Africa, the reason for the high wage bill was due to new power stations needing more employees, along with a need to get more skilled workers and to retain them.

Top executives at the company took home a total of R60 million in the 2014 financial year, up from R57.4 million the year before.

Former chief executive Brian Dames, who left the utility at the end of March 2014, took home a pay package of R15.4 million – the highest salary paid by the company in more than a decade.

Ongoing financial troubles

In June, Eskom reported a net profit of R7.1 billion for the year ended March 2014, up from R5.2 billion in the previous year.

However, earnings were significantly less than the R12.2 billion reported for the six months ended 30 September 2013.

According to the group, the increase in revenue was offset by escalating primary energy costs, especially on open-cycle gas turbines (OCGTs), and an increase in maintenance costs.

Eskom has long been facing massive financial challenges, which have, over the years, been pushed through to consumers through increased tariffs.

Co-operative Governance Minister Pravin Gordhan reported that municipalities around the country owed the group R10.8 billion at the end of June – and according to Public Enterprises Minister Lynne Brown, the group needs to find R250 billion in funding or it could get cut to junk credit status.

According to Reuters, Eskom is in talks with a number of banks for a secured syndicated loan of up to $1 billion.

Nersa recently approved the regulatory clearing account (RCA) for Eskom, allowing it to recover R7.8 billion in revenue – a measure which could see electricity prices climb by as much as 14% in 2015.

Eskom initially sought approval to recover R18.3 billion.

In its 2014 financial year, the group supplied 217,903 gigawatts of electricity to 800 municipalities, 3,000 industrial customers, 1,000 mining customers, 50,000 commercial customers and 84,000 agricultural customers.

Eskom supplies electricity to over 5.1 million residential customers.

More on Eskom

Eskom executives’ pay tops R60 million

Eskom finally gets a new CEO

Eskom goes in search of $1 billion

Eskom blackouts threaten to cripple SA

Must Read

Partner Content

Show comments

Trending Now

Follow Us

Half a million rand for every Eskom employee