Stop pulling state-owned companies down: minister
Public Enterprises Minister Lynn Brown has defended the bonus structure at Eskom and has criticized the Democratic Alliance for pulling state-owned companies down and ignoring their successes.
The DA said in a statement on Sunday, that Eskom’s Integrated Report 2015 on the entity’s financial performance for the 2014/2015 financial year shows clearly that Eskom is in a financial crisis – with a revenue having fallen from R7 billion to R3 billion during the period under consideration.
The report also showed that an amount of R51 million was incurred on fruitless and wasteful expenditure – “and that the entity had a high failure rate in terms of performance targets met,” said Natasha Mazzone, DA shadow minister of public enterprises.
“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.”
Eskom announced on Monday that the country has enjoyed stable electricity supply for a month, adding that it hopes to have a load shedding-free summer.
Minister Lynne Brown hit back at the DA. “It appears some people are happy to constantly pull our State-Owned Companies down and to ignore their successes. In this instance the sensational utterances by the DA Member, Natasha Mazzone, is no exception.”
“She conveniently ignored the fact that Eskom managed to record a marginal profit of R3.6 billion and instead focused on matters which I as Shareholder Representative have addressed with the Board,” Brown said.
“She has been vocal on load shedding and since Eskom managed to find the balance between continued maintenance and keeping the lights on, Mazzone has changed her tactic. That is understandable as she certainly must look for straws to be relevant,” the minister said.
Regarding bonuses, the minister pointed out that it was long-term incentives awarded in 2011/12 financial year, vested in the 2013/14 financial which was payable only in June 2014. These amounts reflected in the 2014/15 financials.
“In view of strict gatekeepers to the payment of bonuses, Eskom Executives did not qualify for short-term bonuses in the past two financial years,” Brown said.
She further explained that, in addition to basic conditions of employment, Eskom’s salary structure is based on the size of the company in the market, using criteria such as revenue, assets, head count and employment costs.
“If one had to really compare Eskom to the market, one would see that Eskom is historically paid below the market median.”
Brown further highlighted the following Eskom achievements during the 2014/15 financial statement:
- Eskom completed the Sere Wind Farm on the Cape West Coast ahead of schedule.
- Currently 100 MW of clean power generated from Sere Wind Farm is being fed into the power grid.
- Medupi Power Station delivered first power to the grid. In March 2015, the first power from Medupi was successfully fed into the power grid. This accomplishment is a significant step towards the production of full power from the first unit and ultimately, the power station itself. The commercial operation of this unit was achieved last month.
- Transmission line construction continues and Eskom successfully completed the construction of 318 kilometres of transmission lines and substations for the year ended in March 2015.
- The majority of the transmission lines strung were in the Northern grid including lines for evacuating power from Medupi and Kusile.
- The electrification of households is ongoing, an additional 160 000 households were connected to the grid over the past year and that while the grid was constrained.
More on Eskom
Eskom fails performance targets, pays bonuses anyway: DA
Loading ...
