Numsa blames Eskom's bloated top management for financial woes

The National Union of Metalworkers of South Africa (Numsa) has blamed Eskom’s bloated management structure for the power utility’s financial woes, as it is unable to pay for salary increases.

Numsa claims that Eskom’s top management has ballooned from 80 executives in 2001 to 500, leading to a massive wage bill of high salaries.

“When Eskom was the global energy utility of the year in 2001, it had 80 top executes and today they are over 500 and they are underperforming,” the union said in a statement.

"This team earns a minimum annual income of R800 000 per annum and above, and have been remunerated with generous bonuses every year."

Eskom employees are demanding a 15% wage increase, but the cash-strapped power generator is unable to offer anything.

Workers are also demanding a housing allowance increase of R2 000 a month, the banning of labour brokers, and the in-sourcing of workers such as cleaners and security guards.

“If sacrifices are to be made in terms of job cuts, it should be from the very same top executives who brought a once glorious institution to the brink of financial ruin, and not the ordinary men and women at Eskom who have worked very hard to ensure that the SOE continues to keep the lights on,” said Numsa.

Adding to Eskom’s woes is a massive debt of R13.5bn owed to it by municipalities it supplies with electricity.

Treasury has issued R350bn of government guarantees to Eskom, of which R275bn has already been used.

The company needs to borrow about R60bn per year for the next four years to finish the new build programme consisting of Medupi and Kusile.

On Thursday, thousands of workers, including Numsa union members demonstrated outside the power utility's headquarters and power stations around the country. The walkout led to power outages around the country as workers abandoned work.

The company has sought an interdict against pickets, with a number of workers on Friday said to have arrested for violating the order.

READ: R13.5bn municipal debt burden 'really beyond Eskom'

Numsa, Solidarity, and the National Union of Mineworkers have declared a dispute with Eskom, and the matter has been referred to the Commission for Conciliation, Mediation and Arbitration for mediation.

Eskom has disputed Numsa’s claim that it has 500 top executives. The utility has put the number at around 400.

“The number of executives is around 400, most of them are involved in the build programme,” said spokesperson Dikatso Mothae.

On Wednesday, Eskom CEO Phakamani Hadebe said the decision not to grant pay increases was due to dire financial constraints faced by the state-owned firm.

Hadebe said the company had to considerably reduce operating cost and capital expenditure, while trying to improve revenue streams.

He said the company had put a moratorium on international travel and offered no bonuses and salary hikes to top management.

Eskom generates more than 95% of the country's electricity.