As embattled parastatal Eskom waits for an answer on its request for a threefold 35% tariff hike, one of the key questions the company has yet to answer satisfactorily is: “Where is all the money going?”
It is well known that Eskom faces bills for the outlay of its new build programme. It has explained that primary fuel, such as coal, is a huge cost — which the company is attempting to address.
But another apparent answer is staff costs. In its 2009 annual report, “employee benefit expenses”, or staff costs, rose to just more than R15-billion from R11-billion in 2008. This 36% increase went to about 35 000 permanent employees and about 5 600 contractors.
Based on Eskom’s figures, the average wage at Eskom, across both contractors and staff, is slightly less than R30 000 a month.
Eskom told the Mail & Guardian that last year permanent staff were paid R13,5-billion, and contractors were paid R902-million. Including contractors, the staff costs reveal an R807-million gap. It is not clear whether this additional money goes towards items such as annual bonuses or other benefits.
When the M&G requested further clarification on where this additional money went, Eskom did not respond to emailed questions.
Eskom has been on a muchpublicised skills drive and it highlights in its report that it needs to recruit 2958 staff with scarce skills in the next five years.
But trade union Solidarity, which represents many of the highly skilled workers Eskom reportedly needs, including technicians and engineers, told the M&G that its members do not receive anywhere near the average R29 000 a month salary and called it “unbelievably high”. Spokesperson for Solidarity Jaco Kleinhans said the union has been concerned about overspending on human resources for some time.
“In some instances workers do get large sums of overtime pay, but that’s a small number of employees,” he said. These include employees who work long hours at critical power stations. Kleinhans said that management at Eskom saw a 25% increase last year, but the latest wage settlement for staff, reached in August last year, saw only a 10,5% increase.
Eskom has stated that it aims to achieve savings from within the company of R22-billion. To achieve this, it will employ measures such as halting the payment for road repairs for roads damaged by Eskom coal supply trucks.
But critics are sceptical that Eskom is doing enough to control the day-to-day running of the organisation.
In the light of civil claims being made by erstwhile chief executive Jacob Maroga, which reportedly amount to R85-million, the issue of what senior management at the floundering parastatal is earning has once again come into the spotlight.
Solidarity noted in a statement earlier in the week that Maroga is also likely to receive 2,9-million shares in the company, valued at about R9-million.
Eskom embarked on an aggressive programme to lure skills into the organisation, going as far afield as the United States, the United Kingdom and Canada to recruit people. But claims by foreign nationals recruited to the organisation suggest that it is not using their expertise.
In interviews with current affairs programme Carte Blanche, a number of expatriate employees complained of poor treatment at the hands of Eskom. They said it had not delivered on promises it had made, which had drawn them to South Africa in the first place.
One such employee spoke to the M&G on condition of anonymity. The source said that not only had Eskom done irreparable harm to the source’s life and career, it had simultaneously wasted numerous opportunities to use the expertise the source brought to the country and organisation.
Allegations of mismanagement at a number of parastatals have resulted in a summit that is due to take place between trade unions and the department of public enterprises in March.
Foreign staffers’ plight
“This organisation is dysfunctional at best.” So said one international recruit brought to South Africa by Eskom in a bid to beef up the skills base at the parastatal.
The staffer claims that Eskom’s failure to deliver on a number of promises to expatriate employees has left many in desperate financial straits and caused untold harm to families as they struggled to settle in.
The tale of Eskom’s foreign recruits was brought to light on the M-Net current affairs programme Carte Blanche. Many are of African or Indian descent and were allegedly used to beef up Eskom’s BEE ratings, despite not being South Africans.
Speaking to the Mail & Guardian, one employee detailed the difficulty of living in a foreign country without the means to finance a car and a house, and of getting children into schools without the required documents from the Department of Home Affairs.
“I was literally dropped into this country and told, ‘to hell with you’,” the source said. “Eskom did not even tell me how to get to Megawatt Park [Eskom’s head office in Sunninghill].”
An investigation into the circumstances of expat employees by audit firm PricewaterhouseCoopers, finalised in 2008, yielded little as Eskom allegedly chose to ignore its findings, which suggested that the employees’ offers be renegotiated.
The source said that despite offers of housing and car allowances, which did not materialise, detailed contracts of employment have yet to be given to these employees — instead, offer letters are all they have received.
Despite promises of career advancement and opportunities for challenging work, the source claims to be tragically underutilised and says the same could be said of many positions within Eskom.
The irony of an organisation that pays a premium for employees with scarce skills but then mistreats those very employees was not lost on the source. “This is a sick organisation; it is not efficient or effective.”
Eskom did not respond to questions asking for comment on the matter.