BIG LOAD FOR ESKOM TO SHED
he retrenchment of some senior executives at Eskom last month is a small first step towards reducing the organisation’s bloated personnel. While the symbolic importance of starting at the top cannot be overstated, it could not have been the most difficult project — senior executives will not be as militant as their underlings.
The real struggle for the utility’s management will come when it tackles the lower levels of the workforce, where overstaffing is the worst. Eskom employees have in the past shown they will stop at nothing to hold onto their jobs. They think little of sabotaging the whole country by destroying electricity infrastructure to get their way. It works in their favour, of course, that in SA few people are ever held accountable for any crime, including treason.
The next step should be to shrink the E-band management, a category that numbers about 300 general managers and senior general managers. It could be argued that this level should lose about one third of its personnel. Most were hired in the years since 2010, when the government included “job creation” in Eskom’s performance targets.
They were recruited along with about 16,000 other staff, one-third of the current workforce, when the government realised the private sector was never going to meet the ANC’S target of creating a million “job opportunities” during Jacob Zuma’s tenure as president.
Malusi Gigaba, as public enterprises minister, eagerly took on the challenge and instructed Eskom to employ more people. That the utility had no need for these new employees did not matter. The 47,658 employees the utility now has on its payroll exclude those employed by contractors building the Medupi and Kusile power stations. Despite the surge in employee numbers, Eskom produces only about 4%
Tmore electricity than it did in 2006. Now that the utility has run out of cash to pay these employees, many of whom do little apparent work, the current management team and board have no choice but to make cuts. This will be no mean feat. The government will of course insist any action is best left until after the general elections.
The urgency of the need to tackle the bloat cannot be denied. Eskom’s outstanding debt will top R500bn by March next year. On the bottom rung of junk status, it costs Eskom about R50bn a year just to service the interest on this. This is after the protection offered by the government guarantees to lenders.
Reducing staff numbers is the single biggest requirement if Eskom is to begin the road to recovery. Naturally, improved operating performance and efficiency, accompanied by lower levels of corruption, would also go a long way to restoring Eskom to sustainability. Should that happen, as it needs to, the whole country would reap the rewards, starting with appropriately priced electricity that would help to lower the cost of doing business.
In many respects, much commendable work has already been done to fix the utility, including cleaning up corporate governance at the top and getting rid of many of those implicated in corruption. But investor confidence can only be fully restored once the workforce has been trimmed to a reasonable size.
Management cannot afford to waste any more time. In the next few weeks it should extend the section 189 process to the E-band managers, and gradually make its way down the ladder.
The most resistance will be met at the unionised levels of employees. Good preparation on the part of management ahead of that confrontation would go a long way to insulating the utility, and the rest of the country, against sabotage.
Reducing staff numbers is the single biggest requirement if Eskom is to begin the road to recovery