Eskom improved offer translates to R38m

Johannesburg - South African power utility Eskom on Tuesday confirmed that the cost of increasing its wage offer by 0.5% is an effective R38m.
   
Eskom at the weekend revised its pay offer to a nine percent wage increase and a R1 500 housing allowance, thereby averting threatened strike action.
   
The utility previously offered an 8.5% wage increase and a R1 000 housing allowance while the unions demanded a nine percent wage increase and a R2 500 housing allowance.
   
Eskom head of resources Bhabhalazi Bulunga told I-Net Bridge that the shift in the offer translates into R488m over and above the National Energy Regulator of South Africa's (Nersa) allowance of a 5.6% wage increase.
   
At 8.5% the offer was R450m above the Nersa allowance.
   
Bulunga confirmed that this amount would have escalated to close on R1bn had Eskom acceded to unions demands for a R2 500 housing allowance.
   
The additional cost over and above the Nersa allowance has to be recovered through greater efficiencies and costs savings at the utility.
   
Bulunga said Eskom has already started discussing a "back to basics" strategy as a way to begin targeting the efficiencies it needs to extract from its business.
   
He said while the current wage deal did not jeopardise Eskom's financially, if similar demands were made by the unions next year Eskom's financial stability could be at risk.
   
The improved wage offer, which is valid for the next year, is being evaluated by the three unions that represent Eskom's 39 000 employees.
   
Solidarity, the National Union of Mineworkers and the National Union of Metalworkers of South Africa are expected to take until Thursday gleaning the opinion of their members before reporting back to Eskom at the CCMA on Friday.
   
"We are confident that the process thus far is going very well," said Bulunga.
   
"Operations are normal and we are confident that come Friday we will be able to finalise the agreement," he added.

- I-Net Bridge