Eskom's head of generation Bheki Nxumalo explained the ins and outs of what caused Eskom’s turnaround and why the company is in a better position as South Africa heads to its summer months.
Nxumalo said that he gets asked frequently what was the “game-changer” that led to Eskom’s success.
During a media presentation on the state of Eskom, Nxumalo praised the company’s recovery plan and the board's ability to approve it so quickly.
“I want to remind you that we presented the recovery plan as soon as the board approved it last April, and we said that this is what would need to be done. These things did not happen by chance and we consistently worked the plan,” he explained.
Nxumalo also acknowledged the importance of reducing unplanned breakdowns and losses. Eskom focused a lot of its attention in maintaining its various units and fixing problems before they got worse.
"It was across the fleet. That is why we have that structural shift. It was the way things needed to be done. We needed to have that culture rolling across the generation fleet," Nxumalo emphasised.
This curbing of unplanned breakdowns has led to a 7,000MW increase in energy capacity.
Staff commitment
Nxumalo also noted the major role the Eskom staff is playing in making the company perform better.
"We have seen a shift in staff commitment, and once the belief is there, we see that there is a good performance across the stations. You can see it; you can breathe it. We are very happy with the support from the board, the ministry, and the public. It was tough to stand in front of the public a year ago," he acknowledged.
The Eskom head also noted that the board and Eskom leadership were able to regain control of staff and human resources, a function that was taken from them by Pravin Gordhan.
The ability to manage the staff was a major contributor to Eskom’s turnaround.
Salary freeze
Eskom’s chairperson Mteto Nyati said that the board had previously decided to place a freeze on salaries. The board also stopped performance incentives, both short-term and long-term.
Nyati thought that this was unfair and hampered moral at the state utility.
"There had been a freeze in salaries for five years. That is something we thought was wrong because it was a collective punishment,“ he explained.
“You were targeted whether you performed well or not. There were no targets that could drive the right kind of behaviour. The responsibility to adjust the pay of employees also sat with the shareholder. That is really a problem, in a company," he added.
Nyati explained that the company decided to implement a monthly incentive bonus for all employees at the various power stations.
This helped incentivise employees to assist and take care of issues before they led to breakdowns and unplanned outages.
"We now have a virtuous cycle where things are happening and are not necessarily driven by us as leadership, but by employees themselves, largely at the back of the incentives. When you start to see people going the extra mile, and they can be rewarded, that is what you want," he said.
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