File Photo: IOL
File Photo: IOL

Eskom flattens executive structure to save troubled utility from collapse

By Luyolo Mkentane Time of article published Nov 20, 2018

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JOHANNESBURG – Eskom said on Monday that it was going ahead with plans to flatten its top structure and merge certain divisions in its quest to enhance operational and cost efficiencies.

The troubled power utility confirmed that it had given Section 189 notices to the F-Band employees which comprise mostly of the utility's top management.

It said the process would include retrenchments to save the company from collapse.

The new structure would merge the roles of group executive distribution and group executive customer service to increase accountability. 

Group executives for generation, transmission, distribution and capital would report to the chief operating officer rather than the chief executive, as was currently the case.

The proposed changes would also see the heads of IT and procurement being demoted to E-Band general managers. 

Heads of strategy, risk and sustainability, security, audit and forensics and corporate affairs would also form a single unit.

“The positions that will be affected by this plan are the F-Bands. The Eskom board of directors decided to review the company's organisational design to enhance operational and cost efficiencies.” 

Last week Eskom said it had to take painful decisions to guarantee its survival.

It said it would implement the nine-point plan to address pressing challenges bedevilling the state-owned enterprise, including fixing full load losses and trips, fixing coal stockpile issues and addressing challenges at new plants, among others.

Eskom has put the number of its top executives at about 400, saying most were involved in the build programme of Kusile and Medupi power stations.

The utility posted a net loss of R2.3 billion and irregular expenditure of R19bn in 2018 despite R350bn worth of government guarantees.

It apparently needs about R60bn a year to finish the building of Medupi and Kusile power stations.

Energy analysts Chris Yelland said the shuffling of the organogram and reduction of executives would not save Eskom.

Yelland said the utility needed to be unbundled to address financial, operational and environmental performances or its bottom line.

He said the proposed structure showed little relevance to the needs of unbundling of Eskom.


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