Why Eskom must pay bonuses

Electricity Minister Kgosientsho Ramokgopa said Eskom employees must be paid bonuses to improve staff morale and performance as the utility struggles with “people problems”.

The Minister revealed this in his appearance before Parliament’s Portfolio Committee on Public Enterprises.

Eskom has not paid out performance bonuses since 2017, and it is not clear where the money to pay bonuses will come from.

Ramokgopa said he had asked Eskom’s management and board to re-introduce performance incentives for employees at power stations based on the station’s performance.

To pay for these bonuses, Ramokgopa suggested Eskom use the money saved from a reduction in the use of diesel as the performance of coal power stations has improved.

However, Eskom has already spent R20 billion of its budget for diesel expenditure in the current financial year, which ends on 31 March 2024.

Bloomberg recently reported that South Africa has been using ships to store diesel to ensure supply to run generators and reduce electricity outages.

Diesel-fired turbines typically intended for peak use have been increasingly run to meet demand, while Eskom’s poorly maintained coal plants remain susceptible to frequent breakdowns.

Since South Africa doesn’t have enough storage capacity onshore, this prompted the use of vessels off the southern coast near Mossel Bay to store the fuel.

People problems at Eskom

Ramokgopa lamented the low staff morale at Eskom in his appearance before Parliament, saying that staff at power stations set to be decommissioned were particularly despondent.

“Workforce morale was extremely low because there have not been incentives in place for a number of years due to legacy issues and the quality of performance,” he said.

Ramokgopa previously said the supply-demand imbalance is not the only problem at Eskom – “there are people issues there at Eskom”.

These issues have nothing to do with the leadership of Eskom, according to Ramokgopa, but are due to a lack of job security.

With Eskom’s ageing coal-powered fleet slowly being decommissioned, people are losing their jobs, and more jobs will be lost.

Eskom closed the dilapidated Komati plant last year and will close another 5 of its 14 remaining coal-fired plants by 2030.

Thus, people are not incentivised to apply themselves at Eskom, Ramokgopa lamented. “The people needed to run these plants do not see their future at Eskom.”

Since then, the government and Eskom have decided to delay the shutdown of plants such as Camden and Hendrina to mitigate the country’s chronic power shortage.

That decision has helped improve worker morale at affected stations because they now “know there is life beyond 2025, and they will be able to continue feeding their families”.

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This article was first published by Daily Investor and is reproduced with permission.

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