The Board Of Eskom Should Be Dissolved And Reconstituted – NUMSA

The Board Of Eskom Should Be Dissolved And Reconstituted - NUMSA

City Press reported that although Eskom incurred massive losses last month, “it still managed to pay each employee an average bonus of R88 000”. We have spoken to our members at Eskom and we can confirm that not all our members received such generous bonus payouts as claimed by the reports. Our members were paid out bonuses based on an internal system and the amounts, in some cases, were much lower than what has been reported. Below is the NUMSA press statement and comments from a brief interview Political Analysis SA’s Stephanie Naidoo had with NUMSA Acting Spokesperson, Phakamile Hlubi.

When we spoke to our members at the National Union of Metal Workers in South Africa what they told us is that the reports are not factually correct, in that, not all of the members received bonuses of R88 000. There is a system that Eskom uses which is based on performance, and based on that system, employees receive bonuses. Many of our members in fact received far less than what was reported on, but the amounts varied. This is to clarify media reports which were creating the impression that workers had somehow benefited, when the fact is they had not. The majority of members certainly did not receive R88 000 as a bonus payout.

Furthermore, as NUMSA we are shocked that managers at Eskom received such generous rewards in the face of poor financial performance and gross wastage by the State Owned Entity. Eskom announced last week that its profits had dropped by 83% and that R3 billion rand had been spent through irregular expenditure.

The stench of corruption surrounding the SOE’s top management continues to linger. Its former CEO, Brian Molefe’s re-appointment and subsequent removal, sparked a national scandal, but he was remunerated with a R2.1million short-term performance bonus. In fact, when Brian Molefe resigned, his resignation was rescinded and there was a scandal around whether he had retired or resigned. We felt that he should never be allowed to return to Eskom because he reigned voluntarily. Our experience as NUMSA, with our own members, is that when they resign voluntarily, they are not given the option of coming back. In the case of Brian Molefe it was even worse; he resigned at a time when there were allegations of serious corruption against him and the Public Protector’s Report which has raised questions around questionable deals which were made. We felt that as long as he had not cleared his name, he should not have been allowed to come back.

At the same time, the Eskom board allegedly deliberately manipulated the pension calculation in order to guarantee him a R30 million rand payout. NUMSA has responded to the reported allegations and investigations of reports claiming that the pension calculation has been manipulated and demands that an independent investigation in conducted.

Furthermore, the acting CEO, Matshela Koko, who is facing disciplinary action following allegations of corruption, received a R1.4m bonus and its chief financial officer, Anoj Singh, who has also been implicated in the Gupta leaked e-mails, received R1.8 million. Eskom confirmed that  that bonuses were paid to Eskom Management. and confirmed that Brian Molefe and Matshela Koko received the amounts that they did. As NUMSA we reject that because we find it unfair that they could receive such generous bonuses when, quite frankly, the parastatal is in a state of chaos and these Senior Executives have not had a glowing recording that organisation, and in that institution.

Eskom, like many SOE’ has been in crisis for a long time. It has been plagued by numerous scandals including the payment of R266 million to Trillian without any proof of work done for the power utility. A report by Denton’s revealed that Eskom wasted about R200 million over two years by failing to negotiate proper discounts with diesel suppliers. Furthermore, the Public Protector found that the Tegeta coal deal was irregular because the Gupta’s received a R600 million pre-payment for coal from Eskom, which allowed them to use the money to buy Optimum Coal mine.

Beyond just the Senior Executives themselves, as NUMSA we went even further, calling for the Board to be dissolved because we do not believe that the state-owned entity is being run properly and efficiently, and it certainly is not being run in the interests of the majority of the South Africans and the working-class.

Eskom is clearly being looted by the state and crony capitalists. As long as the ANC government is paralyzed by cronyism and corruption, the rot in the SOE’s will continue. As NUMSA we re-iterate our demand for the boards of all SOE’s including Eskom to be removed. The only solution is for the entire Eskom board to be “scrapped” and for it to be reconstituted by members of civil society, labour, business and government. This is the first step in cleansing the SOE and introducing a culture of transparency and good governance which is desperately needed.


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