27 March 2008 – Political parties are calling for a probe into performance bonuses paid to Eskom senior management in the light of the proposed tariff increase and Eskom’s withdrawal from a R15 million (US$1.9 million) commitment to fund the SA Aids Vaccine Initiative (Saavi).


Public Prosecutor,
Lawrence Mushwana

The Freedom Front Plus (FF+), have asked public prosecutor, Lawrence Mushwana and NERSA chairman, Collin Matjila to investigate the tariff increase in relation to the formulas for determining performance bonuses "to determine what the personal interest in the tariff increases of senior management at Eskom is".

"The FF Plus is concerned that the way in which the top management of Eskom is being rewarded, is causing expenditures for maintenance and coal stockpiling to be restricted to the minimum.

"On the other hand tariff increases lead to super profits which create a fictional picture of performance and success."

"It is well-known that the demand for electricity of higher income groups is not tied to prices.

”That means that higher tariffs for this income group will not influence the consumption of power of these high-income earners," Spies said.

There was however, real concern that low income groups would be adversely affected, as the demand for power within low income groups was tied in to the prices charged. In addition, the party expressed dissatisfaction that the measure proposed by Eskom would solve the current problems.

"More and more facts indicate that the poor maintenance is the real reason for the power interruptions," the FF+ said.

The Democratic Alliance (DA) in the meantime have said Eskom management must pay back bonuses paid to them in order to pay for its terminated commitment to an Aids vaccine grant.

"This stands in stark contrast to Eskom managers’ stubborn refusal to refund the exorbitant bonuses already paid to them and decline generous share options that are due to vest to them at the end of this month," DA spokesperson Mike Waters said.

"Public Enterprises Minister Alec Erwin needs to step in and demand that instead of terminating the Saavi grant, Eskom managers pay for this R15m (US$1.9 million) grant themselves by refunding their bonuses and declining share options. … the sudden withdrawal of these funds, once committed, places critical research projects in an important area in jeopardy," he continued.

Said Eskom spokesperson, Andrew Etzinger, "It’s not as though we stopped (paying) the Aids vaccine to pay bonuses. While Eskom is committed to community development and Aids is seen as a very serious issue, it is nonetheless not part of our core business."

Etzinger said the utility had re-examined its social responsibility initiatives in light of the financial pressures the utility was under, but that the new build programme would benefit communities through infrastructure development.

"Foremost of the criteria is to support those directly affected by the build programme," he said.