Fury at Eskom decor spree

Utility blows half a billion to spruce up head office as winter blackouts loom

CASH-strapped Eskom is splashing out R500-million to give its head office a lavish face-lift — while seeking a bailout of up to R50-billion from the South African taxpayer.

The five-star makeover features a VIP entrance, new interior decor, landscaped grounds, timber deck walkways and motorised venetian window blinds.

Eskom, which produces more than 90% of South Africa’s power, imposed emergency load-shedding last month and has come under fire for spending R10-billion on diesel — a huge budget overrun — to keep the lights on last year.

Its newly appointed acting CEO, Collin Matjila, has a cloud over his head related to his tenure as CEO of Cosatu’s investment arm, Kopano ke Matla.

Now, as winter approaches — a time when the national power grid is under heavy strain — tender documents show that proposed upgrades to Megawatt Park, Eskom’s head office in Johannesburg, include:

• R3-million earmarked for a VIP entrance and offices, plus R608 000 for curtaining;

• Landscaping at R1.4-million, featuring LED strip lights and a “timberclad seating wall” made from Rhodesian teak;

• Timber deck walkways, carpet tiles in “Eskom blue” and semi-polished porcelain floor and wall tiles;

• Revamped cafés, pause areas with brushed aluminium skirtings, a 9mhigh newsstand, feature walls and an awards cabinet;

• Emergency generator installation at a cost of R8.5-million and uninterrupted power supply systems for R6.7million;

• Air conditioning, heating and ventilation at a cost of R81-million and automatic motorised venetian window blinds; and

• A parking area featuring racks to accommodate 244 bicycles and toilet cubicles with custom-designed graphic wallpaper and new sanitaryware.

Three of Eskom’s biggest unions this week described spending on items unrelated to safety infrastructure as “lavish” and “absurd”. Eskom and the unions are due to start wage negotiations soon.

National Union of Metalworkers of South Africa head of collective bargaining Stephen Nhlapo lambasted the power utility for paying executives big bonuses and hiring consultants.

“Already there are discussions on how to reduce labour costs. How can you reduce labour costs when you are [spending] money on curtains?”

The Democratic Alliance last month criticised the awarding of bonuses of R31-million to Eskom directors over the past two years.

Eskom’s sprawling 90 000m² complex was built in the late ’ 70s and has a swimming pool, gym, sports fields, bowling green, clinic and library. More than 4 000 staff work on site.

Part of the business park is occupied by tenants, the South African Revenue Service.

Tender documents cite the health and safety of staff, space needed for expansion and a desire to be energy efficient and reduce carbon emissions as reasons for the revamp.

Eskom spokesman Andrew Etzinger said on Friday the upgrade was budgeted for and would cost “in the order of R500-million”.

“This is not a status upgrade,” he said. “The idea is not to . . . make it prestigious. These are measures which need to be taken to ensure the occupational health of employees.

“There are definite hygiene factors that affect the building. Second, our data centre is inadequate. We need to protect information and have the correct back-up power supplies you would find in a modern data centre.

“The final consideration is energy efficiency. The building, because it’s old, is not very energy efficient. We’re asking our customers to employ energy-efficient measures and we need to set an example,” he said.

Eskom has been pushing for the Department of Environmental Affairs to grant a postponement for several of its coal-fired power stations and two open cycle gas turbine peaking plants to meet deadlines to comply with strin-

There are discussions on how to reduce labour costs. How can you reduce labour costs when you are [spending] money on curtains?

gent new pollution standards.

Insiders this week said the head office underwent renovations about a decade ago, including a parking area revamp and the relocation of its library.

Business Times recently shed light on an aggressive internal “cost-saving programme” at Eskom.

Staff said austerity measures included early retirement packages, cutting travel costs and cutting out tea and biscuits at meetings.

Eskom blames much of its financial trouble on a decision by the National Energy Regulator of South Africa to grant it an 8% electricity tariff increase, instead of a 16% hike, leaving it with a R225-billion revenue shortfall between 2013 and 2018.

But huge costs have also been incurred due to delays in building Medupi and Kusile, large new power stations. Coal supplier Exxaro slapped Eskom with a R2-billion penalty because Medupi was not ready to burn its coal.

“Eskom failed to manage Medupi and Kusile. Those contractors are looting and delaying the process. The state must cough up,” said Numsa’s Nhlapo.

Consumers are feeling the pinch as electricity prices rise and households

are urged to switch off appliances and save power.

Electricity prices increased 5% in January 1997. But a power supply crisis saw average prices soar 27.50% in April 2008-9, 31.30% in July 2009-10, 24.80% in April 2010-11 and 25.80% in April 2011-12.

“I don’t begrudge them having decent headquarters, but at the same time they should deliver. At the moment they are not delivering,” said South African National Consumer Union vice-chairman Clif Johnston.

National Union of Mineworkers acting energy sector coordinator Mblela Radebe said: “It’s absurd for the company to embark on such upgrades. They will be claiming they don’t have money to pay the workers while they have money to make upgrades they can live without.”

Solidarity’s Johan Kruger said: “The timing is very bad. In our view that is a lavish amount of money. We know that Eskom is in financial trouble. The question is, are they really serious about saving money?”