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Eskom crisis: Bonuses to blame?
26/03/2008 21:14 - (SA)
Cape Town - A group of forensic accountants in Forensies.com have analysed what Eskom says in its annual reports about
the utility's management bonuses, and have concluded that the supply of electricity is not one of the so-called "gate-keepers" that would prevent the bonuses being paid out.
Their report says that the bonus system could be the main contributing factor to the electricity crisis.
The accountants team points out that the executive management of Eskom performed to such an extent over the past three years that long term performance bonuses of R10.3m will be paid to them next Monday March 31.
Certain gatekeeper conditions give the board the discretion to review the bonuses, the team said. "These gatekeeper conditions includes safety factors, operating losses, a qualified audit report and contravention of the Public Finance Management Act.
"Generation and distribution of electricity is however not regarded as important enough to qualify as a gatekeeper condition and therefore there will most likely not be a reconsideration of the bonuses because of the current electricity crisis," their report says.
After analysing the criteria that are used for the bonus payout, the accountants say: "It appears that Eskom chose to promote the narrow political ideologies of its shareholder, like employment equity and black economical empowerment, instead of concentrating on generation of electricity.
"This caused immeasurable damage to the economy of South Africa and is ironically a major setback for achievement of the wider economical and social upliftment goals of South Africa. The performance measurement criteria for the Eskom top managers might just be the main contributing factor to the electricity crisis."
- I-Net Bridge (Business)
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