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BL Premium reports that cash-strapped power utility Eskom has refused to disclose the cost of its three-year pay deal it reached with three unions last week, saying the total will depend on factors such as staff numbers.
“The total amount is confidential and Eskom cannot disclose it for various reasons. Among those is that the figures are dependent on the variable components of the deal, which includes but are limited to the number of employees at the time of implementation per period; utilisation of allowances during the period of the deal, etc.,” Eskom indicated on Monday. Eskom signed a multi-term pay deal on Thursday that will see all non-managerial staff at the state-owned power utility get raises of 7% a year for three years. Stanlib chief economist Kevin Lings observed that it appeared the pay deal might help with labour stability, but warned it risked feeding into “further inflationary pressures”. He added that the pay deal “does feed expectations of similar increases in other institutions, [and] there is a risk this will perpetuate wage increases above inflation. I think it can lead to some perpetuations of wage pressure in the economy and risks keeping interest rates elevated for longer.” According to Lings, the deal was “generous” and “it’s going to cost a significant amount of money [to implement].” He went on to ask: “How is it going to be funded? Eskom’s ability to fund itself is not good. This increases financial risk for Eskom, the government, and limits the ability for Eskom to spend money on other things such as rebuilding capacity within the organisation.”
- Read the full original of the report in the above regard by Luyolo Mkentane at BusinessLive (subscriber access only)
Get other news reports at the SA Labour News home page