Cape Town – Power utility Eskom said on Wednesday its senior executives will not take their annual bonuses for the 2013/14 financial year to address a R225bn revenue shortfall.
Acting Chief Executive, Collin Matjila, said in a statement the top executives at Eskom have acknowledged the financial constraints by agreeing to forgo their annual performance bonuses this year as one of the efforts to cut costs.
“The Board welcomed this move as the company is implementing efficiency intervention initiatives to achieve long-term financial sustainability.”
Instead of its 16% increase as requested, energy regulator Nersa approved a tariff increase of 8%, which left Eskom with a funding gap, according to the state utility.
Eskom said it set up the Business Productivity Programme (BPP) in 2013 to extract efficiencies within the business.
“While significant shifts have been made in terms of business operations to achieve internal efficiencies, the company is certain that this revenue shortfall cannot be achieved by belt tightening alone.
“It remains important to move towards a cost-reflective tariff urgently.
“Eskom, through its shareholder ministry, the Department of Public Enterprises, is in discussion with the National Treasury to find a long-term solution,” said Matjila.
Eskom said it is acutely aware of its obligations and will continue to guarantee security of supply of electricity in support of economic growth, but said Majila “it is important that Eskom remains financially sustainable to enable us to keep the lights on whilst we complete the new build programme that will ease the pressure on the national grid”.