Eskom Board must freeze executive salaries, bonuses and parties

The Eskom board's requested electricity price hike of 14.6% should be matched with a commitment to freeze Eskom executives' salaries increases and bonuses until electricity tariff increases are in line with inflation.

Eskom is reportedly requesting an annual electricity price increase of 14.6% for the next five years from the national energy regulator. These proposals come on the back of tariff increases over the last three years of 24.8%, 25.2% and 16.09% respectively. These increases have seen revenues skyrocket to R114.8bn, with net profit sitting snuggly at R13.2 billion. 

This increase in profits has helped line the pockets of Eskom executives, but has done nothing to help cash-strapped consumers and businesses who bear the brunt of electricity tariff increases.

Eskom CEO Brian Dame's remuneration package has risen to R8.3 million compared with R7.5 million the previous year, whilst the executive team collectively earned R34 million compared with R29 million in 2010. This figure jumps to R54 million when you include bonuses to board and management members. It has also recently been confirmed that Eskom spent R36 million on parties for its staff and their families

How does Eskom justify splashing out on these huge salaries, bonuses and parties while ordinary South Africans are being squeezed by higher electricity tariffs?

Eskom's management team is failing to protect South African consumers and businesses from high electricity prices but are being rewarded anyway. This cannot be right. Their bonuses and salaries should be frozen until such a time that they can keep tariffs in line with inflation.

I have today written to the Chairperson of the Eskom board, Mr Zola Tsotsi, calling for the freezing of all executive pay raises, bonuses and parties until the electricity tariff increases are in line with inflation. 

I will also continue to put pressure on Minister of Public Enterprises Malusi Gigaba to hold Eskom accountable for fruitless and wasteful expenditure. 

Ordinary South Africans cannot be expected to reward Eskom executives for poor planning and financial mismanagement while bearing the burden of high electricity prices. It is time Eskom executives were made to feel some of the pain they are administering to the South African public.

Statement issued by Natasha Michael MP, DA Shadow Minister of Public Enterprise, July 19 2012

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