The cost of primary energy accounts for 70% of Eskoms operational costs compared to 8% cost of workers’ wages which means Eskom can afford workers wage demands
22 May 2023
The National Union of Metalworkers of South Africa (NUMSA) will be meeting with the Eskom management as part of the Centralized Bargaining Forum (CBF) of the entity, for the third round of wage talks this week taking place from Tuesday to Thursday the 25th of May this week.
In the last round of wage talks the Eskom Exco presented financials for 2023/24. The finances presented demonstrate that Eskom can definitely afford to pay workers demands because they are not doing anything to intervene in the biggest cost drivers, which are the Primary Energy costs which have ballooned from R83 billion, in the 2017 financial year, to R155 billion in the 2023 financial year.
Eskom budgeted a further increase of almost R30bn for this financial year which will see Primary energy costs skyrocket to R184bn by the end of this financial year. Primary energy costs accounts for 70% of Eskom’s operational expenditure and it is increasing year on year by more than 15%, while the bargaining unit salary cost which accounts for an average 8% of Eskom’s operational costs, have remained almost the same, which is why we say they can comfortably meet our demands.
Given the current prevailing circumstances, it is likely that the diesel budget will be exhausted in the first 6 months of the financial year, and as such the Eskom board and executive will want to revise their budget and take money that is initially budgeted for workers to fund diesel. Last financial year alone, (which ended 31 March 2023), the Eskom diesel budget was revised from R8 billion to R11 billion, and Eskom ended up spending R21 billion. This was against NERSA’s approved budget of R3.7 billion on diesel.