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Cape Town - Eskom chairperson Bobby Godsell yesterday defended the Eskom chief's massive salary increase.
He told the Portfolio Committee on Public Enterprises that the debate should instead concern whether Jacob Maroga's R5m/year salary is appropriate.
Godsell considered newspaper reports about a 26.7% hike "misleading and unhelpful".
He said that Maroga had received a 9% increase and no bonus following a decision to postpone the payment of long-term bonuses related to Eskom's share scheme until the company broke even financially.
He said the almost 27% difference was an adjustment to Maroga's salary because, at the time Maroga had been appointed to the top position in 2007, he had already been working at Eskom at a salary level inappropriate for a chief executive.
Godsell added that an "intelligent debate" on Maroga's salary was required, especially in light of the fact that Eskom has a turnover of more than R100bn.
In the year that Maroga had been appointed, an international expert had warned him of an impending crisis arising from problems with the power utility's coal stocks, but Maroga had apparently ignored this. The electricity crisis struck the country in January 2008.
Pieter van Dalen (DA) pointed out that Maroga was earning twice as much as the President. He said the increase had been awarded just after the power crisis and that consumers were still paying for the problems.
Committee spokesperson Vytjie Mentor also raised eyebrows on Tuesday when she removed questions about alleged poor management at Eskom from the question list. The questions emanated from internal Eskom documents, the content of which was disclosed last week.
Minister of Public Enterprises Barbara Hogan told the portfolio committee that cheap electricity was unsustainable. "The tariffs are so low that Eskom is unable to proceed with its R400bn capital expansion programme."
Tariffs are linked to Eskom's funding model, which is still to be presented, she explained. Eskom's tariff proposal must be submitted to Nersa by the end of September.
Hogan said that progress had been made with the funding model. It would be announced in the medium-term budget framework in October.
Eskom has expansion projects worth about R88bn which are currently not being financed.
- Sake24.com
For more business news in Afrikaans, go to Sake24.com.