Utility bleeds through inefficiency

Gordhan blames state capture for the utility woes

Power utility Eskom has overindulged in the last 10 years, in the process amassing almost 16 000 additional employees as other companies trimmed down.

The company’s bloated structure was now blamed for its current financial difficulties.

Other issues including maladministration, corruption and state capture have been cited as issues that have paralysed South Africa’s biggest company.

As Eskom looks set to resume salary increase negotiations tomorrow with unions who rejected its zero percent salary increases, citing financial difficulties, job cuts have been mooted as a possible solution.

The cash-strapped utility revealed to Sowetan that it had 32 674 employees in 2007, it now had a 48 629 workforce which had grown at a staggering average of 1 595 a year over 10 years.

Eskom now has 207 more senior managers and executives than it had 17 years ago.

Eskom’s spokesman Khulu Phasiwe said they were in the processes of cutting jobs. However, the bulk of those would be in the form of “voluntary turnover and normal retirement”.

Phasiwe said they planned to cut 7 016 jobs in the next five years as they wanted to have 41 613 employees by 2023. Eskom has already frozen external recruitment.

However, Phasiwe said other “levers such as early retirements will be considered should the need arise”.

National Union of Mineworkers Helen Diatile said the power utility didn’t need 400 senior managers and executives.

“The Eskom manager to employee ratio is terrible, maybe it’s one manager per two employees, and they’re not earning peanuts,” Diatile said.

National Union of Metalworkers of South Africa spokeswoman Phakamile Hlubi said Eskom’s financial situation was self-created due to rampant mismanagement, looting an d corruption.

“To date not one cent has been recovered from executives fingered in corruption; no one has been arrested and no assets have been seized.”

Hlubi said in 2001, when the power utility “was fairly well run, it was managed by a team of 80 people” but it has now grown more than fivefold.

Public Enterprises Minister Pravin Gordhan said Eskom had suffered damages due to, among others, coal supply deals with the Guptas’ Tegeta Exploration company and the manipulation of contracts by previous managers.

“Here’s a concrete example of what state capture does,” Gordhan said.

Energy expert Ted Blom blamed its current state on to reckless management.

“Eskom has lost contact with reality,” Blom said.

He cited “excess expenses” incurred due to “inflated capital costs amounting to more than R200-billion” on projects such as Medupi, Kusile and Ingula power stations.

‘‘ The Eskom manager to employee ratio is terrible