Big bonuses for lec staff

The LEC’s managing director, Mohlomi Seitlheko, announced the “performance bonuses” in a June 10 memo expressing “gratitude to all staff for their continued dedication to the company in these most challenging times”.

Seitlheko said he expectedthe LEC staff to “pull together for the betterment of the company and our nation”.

The bonuses are being paid in batches because the company has serious cash-flow problems. The junior staff were paid in June while middle management and supervisors received theirs last month. Senior managers will be paid this month and executives in September.

How much the bonuses will cost the LEC is not clear but crude estimations could be based on the “labour costs” it presented in its recent tariff review application to the Lesotho Electricity and Water Authority (LEWA).

The power company estimated its “labour costs” for the 2024/25 financial year to be M234 900 045, putting the monthly wage bill at around M19 575 000 which is inclusive of basic salaries and benefits.

Yet even at 67.4 percent of the basic salaries, the LEC is coughing up several millions in bonuses and the company doesn’t have that money, according to Seitlheko’s candid admission in an interview with a local weekly in June.

Ironically, while paying those bonuses the LEC was pleading with the government for help to pay Eskom M348 million for the power supply to make up for the shortfall when the Muela Hydro station shuts down for major maintenance from October to March 2025.

In several meetings with the government, the LEC’s senior management admitted that the company is crippled by massive debts which they blame on being forced by the regulator, LEWA, to charge tariffs way below the cost of power imports from South Africa’s Eskom and Mozambique’s Electricidade de Moçambique (EDM).

Highly placed sources in the company this week told thepost that the company’s total debt is now hovering around a staggering M700 million, a significant chunk of which is owed to power suppliers.

A source said as of June the company owed about M150 million to Eskom and M95 million to EDM. The source said Muela Hydro station, which supplies LEC with the cheapest electricity among its suppliers, is owed the highest amount at about M235 million.

The Lesotho Electricity Generation Company (LEGCO) which owns the Ramarothole Solar Power station in Mafeteng is owed about M43 million.

The LEC is also behind on its levies to LEWA which are now said to be around M60 million.

Private companies are owed about M30 million for various services and products.

While the debts keep piling mainly due to the sub-economic tariffs that have continued to fall way behind the actual power prices from Eskom and EDM, the LEC is also struggling to collect from those who owe it. Government departments, parastatals, state institutions, private companies and individuals owe around M200 million in unpaid power bills.

An aggressive collection strategy that includes cutting off bad debtors has helped somewhat but the figure remains stubbornly high and the management admits this has rendered the company unable to meet its obligations.

Years after years, the LEC admitted that it doesn’t have the money for critical network maintenance and expansion projects. Corruption and fraud by officials have milked millions from the company.

So has power theft through illegal connections, cable theft and other acts of vandalism. Given the M700 million it owes and the M200 million it is owed, it is not clear what the LEC’s board considered when it approved the management’s proposal for the “performance bonuses” of 67.4 percent in May.

Insiders however say there isn’t much performance to justify the bonuses. They say new connections remain low and reaction time to faults is painfully slow.

In 2023, the LEC managed only 3 819 connections against a self-imposed target of 16 521. That’s 23 percent of the target. Some connections and projects have stalled for months because the LEC struggled to get enough power meters.

Performance in other key areas has not been sterling enough to justify a 67.4 percent bonus.

Yet when the management tried to postpone the bonuses to December, citing a stifling cash crunch, the workers reacted with a mild but disruptive job action that left faults unattended for hours and angered customers.

Fearful of further unrest the management gave in to pressure and proposed to pay the bonuses in batches, beginning with junior staff in June and ending with executives in September.

That decision came just as the LEC’s board and management scrambled for funds to keep up with the payments to power suppliers.

At the same time, the company was begging the government to come up with the M348 million to pay for Eskom’s supply during the six months Muela Hydro would be temporarily out of commission.

While the management and the board were meeting the government to discuss that ‘rescue package’ the company was sticking to its roster to pay bonuses.

Sources say in the initial meetings the government – represented by Energy Minister Professor Mahao, Finance Minister Dr Retšelisitsoe Matlanyane and their teams – requested a turnaround strategy and a repayment plan for the M348 million from the LEC management.

The LEC had not responded to thepost’s questions by the time of going to press last night.

Their response will however be published as soon as available.

Staff Reporter