Eskom cancels bonuses for top executives

JOHANNESBURG (Reuters) – South African power utility Eskom said on Wednesday its senior executives would not get annual bonuses this year as the company implemented cost-cutting measures to address a funding shortfall of 225 billion rand ($21 billion).

A lower-than-hoped-for rise in electricity rates last year left state-owned Eskom with the $21 billion revenue gap over the five years to 2018, prompting the utility to look at other funding options and cut costs.

"The top executives at Eskom have acknowledged the financial constraints by agreeing to forgo their annual performance bonuses this year as one of the efforts to cut costs," acting chief executive Collin Matjila said in a statement.

The utility had applied for a 16 percent hike in power rates over the five years, which translated into revenue of 1 trillion rand over the period, but was granted an 8 percent annual hike.

Eskom, which provides 95 percent of the power in Africa's most advanced economy, has been walking a tightrope as it tries to bring long-overdue power plants online to relieve pressure on the national grid.

($1 = 10.7368 South African Rand)