South Africa’s state-owned power utility has refuted claims made by a newspaper over the weekend that a bonus would be paid to Eskom employees.
The news story, which headlined “When is this madness going to end?’: Eskom bonus report sparks ire”, claimed that the utility allegedly wanted taxpayers to “cough up a further R1.8bn for performance bonuses up until 2022”.
The utility responded on Monday morning that it has not applied to the National Energy Regulator of South Africa (NERSA) for R1.8 billion to pay performance bonuses, as reported in a Sunday newspaper.
Eskom bonus not reported correctly
In a media statement, the power utility expressly stated that the MYPD4 application made by Eskom for the three year period did not include any allocation for performance bonuses.
“The application included a provision for an annual bonus for the three year period, which is equivalent to a 13th cheque which forms part of the Eskom basic conditions of service and cost to company – i.e. employees’ normal remuneration package,” the statement explained.
According to Eskom, for those employees for whom a 13th cheque is not part of their conditions of service (i.e. non-union employees) an option is given to structure their package to provide for a 13th cheque without increasing their overall compensation.
In keeping with a board decision reflecting the poor performance of the business, no performance bonuses have been paid to employees in the past two years, Eskom stressed.
NERSA in its decision incorrectly disallowed these contractual costs and hence they do not form part of the allowed revenue granted to Eskom.
Going to court
Separately, Eskom has lodged a court application to review NERSA’s fourth multi-year price determination (MYPD 4) decision to deduct the R69 billion that the government has provided to Eskom as shareholder support.
The court application does not include any other aspects of the MYPD4 decision.
This case will be heard in court next week.