News / Opinion / Columns

William Saunderson-Meyer
3 minute read
28 Apr 2018
9:00 am

One Indian employee can do as much as 40 at Eskom

William Saunderson-Meyer

Ramaphosa’s administration is going to have to, very soon, seize the nettle of over-staffing. Otherwise, a Greek-style collapse will force them to.

Saftu members are seen during a protest against the national minimum wage in the Johannesburg CBD, 25 April 2018. Picture: Jacques Nelles

For the jaded observer, there is some satisfaction in watching banal slogans come back to bite their creators on the bum.

Whether it’s Donald Trump’s Make America Great Again, or Cyril Ramaphosa’s New Dawn, the reality of being able to control only a subset of cogs in the lumbering behemoth that is the global politico-economic order means disillusion is inevitable.

That things are bad and likely to get worse before they get better, is not a message that voters want to hear. Even as Greece trembled on the brink of economic collapse a few years ago, its government was blustering and cursing the fates until the last second. Then they buckled under the weight of the inevitable.

The populist Syriza party that had sworn never to surrender Greek sovereignty – the right to run a notoriously corrupt, overstaffed, overpaid and incompetent government bureaucracy dispensing unaffordable amounts of social largesse – upon winning the election promptly broke every campaign promise. Harsh austerity measures were imposed and they acted to curb union power.

The parallels with South Africa are obvious. All that remains at issue is exactly when we are going to hit the brick wall and whether, instead of adapting to reality, the electorate will instead double down its bet on red, handing us a Zimbabwean outcome instead of a Greek one.

Take the difficulties of Eskom and South African Airways (SAA).

Eskom has long been in a poor state, limping from crisis to crisis and, along the way incurring R350 billion in government-guaranteed debt. It will take more than managerial expertise to solve this problem, since it ultimately demands political courage to cut staff.

World Bank comparisons show that Eskom is overstaffed by 66%, with an average salary of more than R700 000 a year. Productivity is terrible, with the equivalent utility in India producing about 40 times as much electricity per employee as Eskom does.

Then there’s SAA’s release of its 2016/17 accounts, a year late, to coincide with its executives turning up yet again to plead for another cash injection. This time it’s R5 billion, which comes on top of R20 billion in bailouts last year, and the likelihood of Treasury having to intervene again to help pay the R9 billion due in 2019.

These statistics are not the worst. The worst is the attitude of SAA executives and politicians.

For example, there is the “too big to fail” argument. Deputy Finance Minister Mondli Gungubele says it would cost as much as R60 billion to shut down SAA, three times as much as what is needed to stagger through to 2021, by when the airline will apparently be soaring.

That’s nonsense. Sell SAA at a bargain price. Free of government interference, the buyer will do the obvious: slash routes, staff, overheads and put in oversight mechanisms to reduce its staggering levels of theft and corruption.

If South Africa is ever to see Ramaphosa’s “new dawn”, a key issue is over-manning. The militancy of Wednesday’s one-day national strike by Saftu indicates how difficult it is going to be.

Nevertheless, Ramaphosa’s administration is going to have to, very soon, by choice have to seize the nettle. Otherwise, a Greek-style collapse will force them to.

William Saunderson-Meyer

William Saunderson-Meyer.

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