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14.

1995

ANNEXURES 14.4 ANNEXURE 4 ESKOM ACCOMMODATION POLICY 1. POLICY Eskom endorses the Government's goal which recognises the right of all South Africans to a secure home in which to live in peace and dignity. While the Government is ultimately responsible for ensuring that housing is provided to all, Eskom will provide subsidies and support to employees to enable them to obtain appropriate accommodation. Eskom prefers that employees own the accommodation in which they reside. 2. POLICY INTENT 2.1 Interest subsidy An interest subsidy through the Eskom Housing Subsidy Scheme will be made available to subsidise an employee's bond repayment in respect of a residential dwelling purchased for his personal occupation. The subsidy on a Personal Housing Loan will also be an interest subsidy. 2.2 Rental subsidies for private rental agreements As an alternative to home ownership and by the choice of the employee, the employee will be eligible to receive a rental subsidy for a private rental agreement. The subsidy will be based on the Eskom Housing Subsidy Schemes principles and formulas. 2.3 Renting of Eskom accommodation Employees will be able to rent Eskom accommodation at a marketrelated rental minus a subsidy. The subsidy will be based on the Eskom Housing Subsidy Schemes principles and formula. 2.4 Security of tenure Eskom will support security of tenure by promoting individual and group ownership. Eskom houses will be made available for sale to Eskom employees in support of this long-term goal. 2.5 Education Home owners, prospective home owners and tenants will be informed and educated about available options and processes in order to enable them to make informed choices. 8 November

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2.6

Structures to assist employees Structures will be created and implemented to: Assist employees by, amongst other things, facilitating access to the state capital subsidies to augment Eskom subsidies and make housing more affordable. Facilitate community and employee involvement.

2.7

Support for first-time home owners Additional support will be provided to first-time home owners.

2.8

Supply of accommodation Eskom will facilitate the supply of accommodation meeting agreed minimum standards for purchase or rental where the market cannot supply such accommodation.

2.9

Freedom of choice Individual freedom of choice will be allowed within the parameters of this policy.

2.10

Criteria for the allocation of vacant Eskom houses Eskom houses will be available to all employees, subject to the availability of houses and to prevailing Eskom policies.

2.11

Phasing out of water and electricity subsidies Water and electricity subsidies will be phased out over a period of seven years. (refer to paragraph 14.4 of Annexure 4) below.

3.

INTRODUCTION 3.1 In line with the Reconstruction and Development Programme (RDP) and National Housing Policy, Eskom promotes long-term security of tenure for its employees to acquire their own homes either through individual or group ownership. Home ownership is thus the preferred option. Eskom employees will have the right to purchase homes through the Eskom Home Ownership Subsidy Scheme (EHS) or to rent suitable accommodation. On exercising one of these choices, the employee will be granted an accommodation subsidy, which may be an interest subsidy or a rental subsidy. An employee who rents accommodation in subsidised Eskom single quarters may also qualify for the Personal Housing Loan (PHL) scheme under certain conditions (refer to paragraph 4.3 of Annexure 4).

3.2

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3.3

An employee who is a member of a family already receiving a housing subsidy and who lives with his family will not be eligible for an accommodation subsidy. An employee will be required to state

formally that he is the sole recipient of a subsidy for such accommodation. 3.4 Eskom housing will be offered for sale to Eskom employees, or made available to employees for rental, subject to the rules set out in the policy document and addenda. In any one geographic area a limited number of dwellings may be retained by business unit management to facilitate transfers of employees. These dwellings will not be placed in the pool of dwellings to be made available for sale or rent but will constitute a quota for that business unit. These dwellings may, however, be rented on the basis of a 30-day notice period, depending on operational requirements. Except where it is essential for operational reasons that an employee live within a certain radius as discussed in the Business Unit Forum, taking into account where employees currently live, employees will have freedom of choice as to where they wish to reside. Eskom will not be responsible for providing transport other than on current defined routes if an employee wishes to buy or rent accommodation outside the radius. An employee receiving an accommodation subsidy shall occupy the property himself. In the case of a Personal Housing Loan, the property shall be occupied by the employees immediate family. Abnormal cases will be dealt with on an ad hoc basis.

3.5

3.6

3.7

4.

INTEREST SUBSIDIES 4.1 Eskom Housing Subsidy Scheme (EHS) Subject to the following restrictions, employees qualify for an interest subsidy on a bond. The property on which a subsidy will be paid also has to fall within certain categories. 4.1.1 Employees who are unmarried and under the age of 21 years are subject to the following Deeds office conditions. The bond shall not exceed R100 000 (in terms of Government Gazette). Approval shall be obtained from the Master of the Supreme Court.

Apprentices, learners and trainees do not qualify, except: Permanent employees who have become apprentices. Where it can be established that their positions are permanent. 14 04(3)
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Insolvent employees will regain all previous rights after rehabilitation. Temporary, casual or occasional workers do not qualify. 4.1.2 Restrictions on the property

4.2

A bond shall be registered on the property. The property shall be registered in the employee's name or in the name of his spouse or in both names. The value of the property shall provide adequate security to cover the bond. The extent of the property shall not exceed 8,565 hectares (10 morgen).

Rules and regulations The complete set of rules governing Eskom Housing Subsidies and Personal Housing Loans is contained in the following three documents: 4.2.1 4.2.2 4.2.3 Guide to Rules and Regulations providing details of the Eskom Finance Company's rules as a financial institution. Eskom Housing Subsidy Scheme Rules providing details of the rules as set out by Eskom as the employer. Eskoms Service Conditions.

4.3

Personal Housing Loans (PHL) Employees who wish to acquire family accommodation in traditional rural areas and/or unproclaimed areas where bonds cannot be registered, qualify for a PHL (refer to 3.2).

5.

PHASING IN OF INCREASED RENTALS AND PRIVATE RENTAL SUBSIDIES 5.1 5.2 5.3 Where employees prefer to rent, Eskom will provide a rental subsidy upon satisfactory proof that a dwelling has been rented. Rentals will be governed by market forces and Eskom will not attempt to artificially level the inherent inequalities of the housing market. The rental subsidy will be based on the same formula used in calculating the interest subsidy for home owners through the EHS.

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5.4

Satisfactory proof of rental of a dwelling will be deemed to be the production of a valid lease agreement, preferably for twelve months or more. In order to continue to enjoy an accommodation subsidy on rented accommodation the employee shall furnish proof of renewal of the lease agreement to the appropriate Human Resources function. The HR function will be responsible for maintaining a follow-up system based on the anniversary dates of all employees who receive the accommodation subsidy on rented accommodation. Eskom reserves the right to inspect the leased property.

5.5

When an employee chooses to rent in the external market, he will be provided with a proposed rental agreement containing a transfer break clause. Use of such a clause will assist the employee in the event of transfer. In choosing a home to rent, the employee will be assisted by Eskom by means of market information and guidelines to ensure that rentals are realistic and market-related. Eskom reserves the right to investigate the market before approving rental subsidies. Care will be taken to ensure that sound comparisons are drawn between Eskom-owned properties and the general external market. In the case of rental of Eskom housing proof of a lease agreement will not be necessary as the rental will be recovered from the employees salary. In the allocation of Eskom dwellings for rental, preference will be given to married or single-parent employees who have their spouses and/or dependants living with them. Only when no married or single-parent employees who have their spouses and/or dependants living with them wish to rent or purchase Eskom dwellings may such dwellings then be offered to single employees for rental. Where no Eskom accommodation is available or where employees wish to exercise their right not to make use of available Eskom accommodation, employees will be responsible for finding accommodation in the normal commercial market. Employees who have difficulty in locating accommodation of a suitable standard may enlist the assistance of the Unit or Regional Manager of Esprop through the participative structures. The increased rentals will also apply to Eskom single accommodation. Rental subsidies for employees with private rental agreements: 5.12.1 The full subsidy will be paid with effect from 1 January 1996.

5.6

5.7 5.8

5.9

5.10

5.11 5.12

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5.12.2 The rental subsidy will be based on the same formula used in calculating the interest subsidy for home owners through the EHS. The subsidy will be calculated over a repayment period of 20 years and at an interest rate of 16% based on 25% of the employees basic salary. The rental subsidy paid to the employee will be the lower of the rental subsidy based on 25% of the employees salary and the rental subsidy on marketrelated rent. 5.12.3 Only employees who can provide valid lease agreements will receive rental subsidies. 5.12.4 An employee who has an existing Personal Housing Loan will be eligible to receive a rental subsidy for a house or flat but will then not be eligible for a future Personal Housing Loan.

5.12.5 An employee shall occupy the house for which he is receiving a rental subsidy. 5.13 Phasing in of increased rentals for Eskom houses and single accommodation over a seven year period 5.13.1 Renting of Eskom houses is subject to availability. 5.13.2 Rentals for Eskom houses and single accommodation will be increased over a seven year period until they are equal to market-related rentals minus a rental subsidy. 5.13.3 During the phasing period an employee whose rental is currently fully subsidised will pay the following percentages of the rental he should actually be paying. 1996 10% 1997 25% 1998 40% 1999 55% 2000 70% 2001 85% 2002 100%

5.13.4 The rental subsidy will be based on the same formula used in calculating the interest subsidy for home owners through the EHS. The subsidy will be calculated over a repayment period of 20 years and at an interest rate of 16% based on 25% of the employees basic salary. The lower of the rental subsidy based on 25% of the employees salary and the rental subsidy on market related rent will be used to calculate the applicable rental as per the phase-in described in paragraph 5.13.3. See examples in Sections 15 and 16. 5.13.5 The process by which market-related rentals are to be determined will be formulated by the National Housing Steering Committee for consideration by the CNF. The market-related rental will be determined in the last quarter of every year and applied from 1 January of the following year. 14 04(6)
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5.13.6 The rental of employees currently paying a higher rental than that specified in the proposal will be frozen until the phased rental is equal to their current rental. Employees paying a higher rental than that proposed for year seven of the phasing will be placed on the rental proposed for year seven. 5.13.7 An employee moving from one house to another will pay the phased rental applicable to the specific house into which he moves. (subject to 5.13.6). 5.13.8 An employee currently renting a house from Eskom will have first right to continue to rent the house or to purchase the house. 5.13.9 An employee shall occupy the house for which he is paying subsidised rental.

5.13.10 An employee with an existing Personal Housing Loan will be eligible to occupy an Eskom house or flat but will then not be eligible for a future Personal Housing Loan. 5.13.11 The increased hostel rent will not be implemented until the upgrading of a hostel room has been completed. 5.13.12 An employee not already renting Eskom accommodation but wishing to rent an Eskom house or flat will have to pay the phased rental as per year seven of the proposal. This is the full market-related rental minus the subsidy as calculated per paragraph 5.13.4. 5.13.13 The allocation of transit accommodation where employees are transferred must be dealt with in terms of Eskoms service conditions. 6. SALE OF ESKOM HOUSES 6.1 Eskom's housing stock (except for quota houses) will be offered to Eskom employees, subject to qualifying in terms of Eskom's Housing Subsidy Rules. In the sale of houses, preference will be given to married or singleparent employees who have their spouses and/or dependants living with them. Only when no married or single parent employees who have their spouses and/or dependants living with them wish to purchase an Eskom dwelling may such dwellings be offered for sale to single employees. An employee who has purchased an Eskom dwelling will not be eligible to purchase another within a period of three years, except in circumstances where he has been transferred to another business unit and is obliged to move there.

6.2

6.3

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6.4

Where there is no requirement from qualifying Eskom employees to rent or purchase an Eskom dwelling, Esprop will offer the dwelling for sale in the commercial market, subject to the provision that no such dwelling shall be offered for sale in the commercial market before 31 December 1996. In areas where it has been established that there are no Eskom employees who could buy the houses, such houses may be offered for sale in the commercial market after discussion by the National Housing Steering Committee. The process by which the selling prices of Eskom houses will be determined is as follows: 6.5.1. Basic Principles The following basic principles have been agreed on: (i) A centralised method is to be used (ii) Prices will be finalised on a decentralised basis (iii) The Housing Steering Committee and the Regional Housing Committees will oversee the pricing process on their respective levels

6.5

(iv) (v)

Tax implications should be taken into account when determining the method Simplicity must prevail.

6.5.2. Transparent Process An employee applying to buy a house will be allowed insight into all the information pertaining to the house he wants to buy. 6.5.3. Determination of the market values of Eskom houses (i) The market value of a house will be the average of 2 valuations done by valuators registered with the institute. One valuator will be appointed by Eskom. The employee applying to buy the house will choose one valuator from a list developed by the Regional Housing Steering Committee.

(ii) (iii)

6.5.4.

Selling prices of Eskom houses When buying Eskom Houses: (i) (ii) (iii) Up to 31 December 1996 Employees shall receive a discount of 20% of the average market value of the house. The discount will be processed via the payroll and will be taxable. The after tax portion of the discount shall be used as a deposit on the house. 14 08(8)
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7.

STRUCTURES 7.1 Where necessary, Eskom will develop and implement structures enabling employees to gain access to accommodation and providing information that will assist them in their decision-making. These structures will facilitate: 7.2 The education process. Housing transactions. Access to state subsidies to employees who qualify. Monitoring the implementation of the Housing Policy. Initiatives that will enable our employees to gain access to accommodation. Initiatives which ensure employee and community involvement.

A "one-stop shop" for housing will be created. The Eskom Finance Company will serve as a One-Stop-Shop for the Eskom Accommodation Policy. This will reduce the confusion as to whom the employee should see when he decides to enter into any form of accommodation contract to be subsidised by Eskom, and will provide:

7.2.1

Education The complete education package as envisaged by Eskom and the trade unions will be presented by appropriately trained EFC practitioners. This programme will be tested at the CNF

7.2.2

Rental subsidy administration Systems and facilities to administer the rental subsidies will be implemented in order to provide a complete service to Eskom and its employees.

7.2.3

State capital subsidies An application will be made to the Director of Housing to enable the EFC to act as a government agent in order to facilitate Eskom employees' access to these subsidies.

7.2.4

Interest subsidies The Eskom Finance Company will provide the administration of interest subsidies.

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7.3.

The National Housing Steering Committee will: 7.3.1. Monitor the implementation of the Housing Policy. Accounting systems will be developed and implemented to assist with the implementation and monitoring of the new Housing Policy. The monitoring of the implementation process will be carried out in cooperation with the CNF. In cooperation with the Esprop Manager, investigate potential joint ventures for the provision of accommodation to employees. These initiatives will depend on demand and each venture will be structured according to the specific needs. Coordinate implementation in order to ensure fair implementation and the investigation of needs and local conditions without diluting the overall intent of the total Eskom Housing Policy. Coordinate National Housing Forum representation through SACOB and the BSA. Currently representation is being formalised. Facilitate community and employee involvement at local level.

7.3.2

7.3.3

7.3.4

7.3.5 8.

SUPPORT FOR FIRST-TIME HOME OWNERS 8.1 The Eskom Housing Subsidy Scheme is available to employees wishing to use the interest subsidy as an option. The interest subsidy

is geared to support first-time home owners who can only afford a smaller bond as their subsidies are proportionally higher than those of employees who can afford larger bond repayments. 8.2 Structures that will assist employees with accommodation will be implemented and adapted from time to time in order to meet the requirements of the changing environment. Education programmes will be presented to provide Eskom employees with requirements so that they can make informed choices. A Communication Strategy specific to Eskoms Accommodation Policy will be adopted to reach and involve all Eskom employees. Support structures such as the One-Stop Shop are being put in place to assist all employees. To make it as easy as possible for the first-time home buyer or anyone else who qualifies for the state's capital subsidy to gain access to this subsidy, in order to make housing more affordable, Eskom will facilitate the process. 14 04(10)
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8.3 8.4 8.5 8.6

8.7 9.

Alternatives to facilitate owner-building and protect owner-builders as well as Eskom will be investigated on a continuous basis.

SUPPLY OF ACCOMMODATION 9.1 Should the Esprop Manager be satisfied that the normal commercial market is unable to meet the needs of the employee(s), the Esprop Manager will facilitate the purchase, rental or construction of dwellings of an appropriate standard, taking into consideration community needs and standards. In the event of construction of a new power station or other operational function such as a major substation, Eskom will be responsible for ensuring that the normal market can provide for the accommodation needs of the power station employees. In the event that the market is unable to provide such accommodation, Eskom will facilitate the provision of appropriate accommodation of a suitable standard at market-related rentals or purchase prices to these employees.

9.2

10.

SWITCHING BETWEEN RENTAL AND INTEREST SUBSIDIES From 1 January 1996 no employee will be allowed to change from an interest subsidy on a bond to a rental subsidy unless he is transferred by Eskom and is required, as a result, to move to his new workplace. Other exceptional cases will be evaluated on an ad hoc basis.

11.

SECURITY OF TENURE 11.1 Sale of Eskom houses 11.1.1 There will be no contractual control over the resale of dwellings purchased from Eskom.

11.1.2 An employee who currently rents a dwelling from Eskom will have first right to continue to rent the dwelling on implementation of the Accommodation Policy. 11.1.3 An employee who currently rents a dwelling from Eskom will have first right to purchase the dwelling after implementation of the Accommodation Policy. 11.1.4 Housing currently let to non-Eskom employees will be offered for rental or sale to qualifying Eskom employees subject to the law of hire goes before sale. The existing tenants lease must reach its full term first. (See Section 18 for criteria for allocation of Eskom houses).

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11.2

Unproclaimed areas 11.2.1 The proclamation of Eskom villages and flats is in process and proclamation of all villages and flats except Drakensberg is anticipated. The purpose of the proclamation is to enable Eskom to sell the houses in these areas. 11.2.2 It is illegal to sell residential property in an unproclaimed area. For this reason, employees who wish to purchase in an unproclaimed town will be allowed to obtain an option to purchase at the specified price, which price shall remain fixed for a period of 24 months. 11.2.3 During the period of occupation of a dwelling on which the employee holds an option, the employee shall pay the prevailing Eskom rentals.

11.3

Security of tenure with regard to rental 11.3.1 Death In the event of the death of an employee, the employee's spouse will be allowed to continue to occupy the dwelling at a subsidised rental for a period of four months after the decease of the employee. Thereafter the spouse shall vacate the dwelling, subject to the following: (a) The surviving spouse of an Eskom employee will have the pre-emptive right to purchase the dwelling that is occupied by the spouse on the terms and conditions outlined in Eskom's Accommodation Policy with regard to the sale of houses. Such pre-emptive right shall be exercised in writing before the expiry of a four-month period following the death of the Eskom employee.

(b)

11.3.2 Prolonged illness In a case of prolonged illness where an Eskom employee no longer has any vacation or sick leave to his credit, and is financially unable to afford the rental, the Business Unit Manager may elect to subsidise the employee's contribution to the rental of the dwelling. 11.3.3 Retrenchment Where an Eskom employee occupies a rented Eskom dwelling and is retrenched by Eskom, Eskom will allow the employee to continue to rent the dwelling at a subsidised rental for a period of six months. Thereafter the employee may be allowed to occupy the dwelling at a normal market-related rental if there is no demand for the dwelling by Eskom. 14 04(12)
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Where an employee is retrenched by Eskom and occupies a dwelling rented from a third party, Eskom will include in the employee's retrenchment package an amount as negotiated at the CNF. The employee will remain personally responsible for the rental payments. 11.3.4 Divorced/widowed If an Eskom employee who has dependent children and occupies a dwelling rented from Eskom gets divorced or is widowed, the employee will be allowed to continue to occupy the dwelling. 11.3.5 Retirement/resignation In the event of retirement or resignation, an employee may elect to purchase a dwelling rented by him from Eskom at prevailing market rates, subject to the operational requirements of the BU. Where the employee does not exercise this option, the dwelling rented from Eskom shall be vacated within 30 days of the date of retirement/resignation. 12. EDUCATION 12.1 Intent Through a process of education and information every Eskom employee will be made aware of the benefits of the Eskom Accommodation Policy and be empowered to: 12.1.1 Understand and be aware of his rights, risks and responsibilities. 12.1.2 Apply this knowledge to obtain appropriate accommodation by making use of the most effective subsidy scheme available to him. . Quality criteria 12.2.1 Every employee without exception must:

12.2

Be informed about the policy, what it is and the reasons for it. Be able to identify his own position and know what aspects of the policy apply to him. Be aware of the benefits, rights, risks and obligations/responsibilities applicable to his choice. 14 04(13)
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Be able to determine the affordability of his choice. Know where to get detailed information and advice on the procedures and administration requirements in terms of both of his current position and his next option(s).

12.2.2 Administration support and counselling staff should have:

Detailed exposure to the policy, with emphasis on the principles involved. Been trained in the procedures and systems, supported by appropriate manuals, hard copies, computer systems, etc. The knowledge as to whom and where to obtain expert advice (e.g. EFC, etc) The appropriate competencies to advise Line Managers and decision makers.

12.2.3 Information and education appropriate to the different levels or target populations should be developed. 12.2.4 The education programme should be able to tie in with future education interventions regarding for instance, subsidised meals, catering, subsidised water and lights, transport policies, etc. 12.2.5 Appropriate and user-friendly systems should be in place. 13. . 13.1 Minimum acceptable standards 13.1.1 Overview The following minimum standards have been compiled after consultation with parties from within Eskom, the hostel residents themselves, representative trade unions, the CSIR and the National Housing Forum. While it is probable that all DETERMINATION OF MINIMUM ACCEPTABLE STANDARDS FOR ESKOM SINGLE QUARTERS

the single-quarter rooms and related facilities will far exceed the standards set out, the objective is to ensure that the residents in Eskom hostels have these minimum facilities available to them. Once these standards have been finalised and the gap between current and proposed standards has been measured, the costing of the project will be carried out. 14 04(14)
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13.1.2 Individual choice The residents right to decide whether he wishes to live in a single room or in communal quarters cannot be ignored. There is concern that individuals will be forced to move into the more private facilities whereas there are those residents who may wish to remain in communal rooms. 13.1.3 Room occupancy and size (i) Only one person shall occupy a single room which shall be approximately 12-14 m2 in size. The size of the room may vary from one place to another depending on the physical structures already in place. The minimum acceptable standard will be approximately 12 m2. The new accommodation will contain no self-catering facilities. There are numerous reasons for this, the most obvious concerns being safety, insurance and hygiene factors.

(ii)

. 13.1.4 Furniture While Eskom will attempt to maintain some extent of uniformity on a national basis, it must be accepted that there will be differences in the appearance of furniture. It is recommended that all rooms could be equipped with the following: (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) Metal bed base with a spring mattress. Vinyl tiles and rugs. Curtains. Bedside tables. Cupboard or lockers that can be locked. Desk and chair. Reading lamp. Doors with locks.

13.1.5 Electricity While all hostels currently have electricity, rooms will be provided with the following electrical appliances and fittings in future: (i) (ii) (iii) (iv) At least one plug fitting. Built-in space heater, where appropriate. This will depend on the location of the quarters. Overhead light. The rooms at Matimba will be provided with fansinstead of heaters. 14 04 (15)
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13.1.6 Ablution facilities Current ablution structures at the Eskom hostels will allow for the following facilities to be provided to the residents. The

facilities set out below will be shared by five single-quarter residents: (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) 13.1.7 Other The following will be provided: (i) (ii) (iii) (iv) Basic laundry facilities consisting of washtubs, ironing tables, plug points and washing lines. Ventilation in buildings. Painted walls as per normal maintenance requirements. Predetermined maintenance standards will be adhered to including replacement of burnt-out light bulbs, plumbing repairs, ensuring that ablution blocks have toilet paper, etc. Cleaning of rooms, including basic dusting, emptying refuse bins, etc on a weekly basis. Cleaning of ablution blocks on a daily basis. Guest toilets for visitors to the single quarters. Ablution facilities including hot, running water, One toilet with seat and cover, One basin, One shower fitted with shower curtain for privacy, One mirror, Towel rail or hooks on which to hang towels, The passage between the rooms and the ablution blocks will be covered, Urinals will be included in the ablution blocks.

(v) (vi) (vii)

13.1.8 Security The following security will be provided: (i) (ii) (iii) Rooms that can be securely locked. Access control at the main entrance to the single quarters. Day guests will be signed in and out by the single-quarter residents. Demarcated parking bays.

13.1.9 Sports, recreation and entertainment facilities Eskom will provide the following facilities: (i) (iii) Television lounge (one television set for every 50 residents). Bar facilities on cost-recovery basis. 14 04(16)
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(iv) (v) (vi) (v)

Indoor entertainment facilities. Where the cost of these facilities is deemed to be high (pool tables, etc.), these will be provided on a user-pay principle. Public telephones. Library facilities are deemed to be a reasonable request and Eskom will endeavour to make this service available to the residents. This issue should be dealt with by ABD. Mobile libraries and other available resources will be used where possible.

13.2

Measuring the gap between existing and proposed standards It should be noted that in order to close the gap between existing and proposed standards, all existing accommodation will have to be physically upgraded so as to turn the communal rooms into single rooms. One of the serious problems the hostels currently face is the fact that each hostel has its own set of standards in terms of the furniture. Following an evaluation of all the hostels, it is estimated that approximately 75% of all the rooms will have to be refurbished in terms of providing items such as reading lamps, study desks and chairs, etc. Almost none of the rooms currently have these articles.

13.3

Implementation of the upgrading Closing the gap between current conditions at Eskom single quarters and the proposed standards should begin as soon as feasible.

14.

PHASING OUT OF WATER AND ELECTRICITY SUBSIDY The water and electricity subsidy currently received by employees will be phased out over a period of seven years, during which the employee will receive the following units of electricity and water free of charge.

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14.1

Proclaimed municipal areas 1996 27 1997 1998 1999 23 18 14 450 720 600 375 480 300 360 2000 9 225 240 2001 2002 5 150 120 0 75 0

Water (kl) Electricity October to March (kWh) 0 Electricity April to September (kWh) 14.2

Outside proclaimed municipal areas

Water (kl) 0 Electricity October to March (kWh) 0 Electricity April to September (kWh) 0 14.3

1996 27

1997 23 900

1998 18 750

1999 14 600

2000 9 450 855

2001 2002 5 300 570 150 285

1 710 1 425 1 140

Employees currently residing in Eskom single accommodation and moving to Eskom family accommodation will receive the phased water and electricity subsidy payable at the date of movement and this subsidy will be phased out as described above. Employees not currently residing in Eskom accommodation will not receive water and electricity subsidies when moving into Eskom Houses. Employees currently residing in Eskom Houses but not receiving water and electricity subsidies will still not receive water and electricity subsidies.

14.4

14.5

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15. 7 YEAR PHASING EXAMPLE Curre nt 1400 558 842 42 7 YEAR PHASING EXAMPLE 1996 1997 1998 1999 2000 1540 598 942 94 52 1694 1863 642 690 1052 1173 263 169 1431 469 206 2050 743 1307 2255 801 1454 2001 2480 2002 2728 935 1793 1793 420 935

Market rental (level 1 house) Rental subsidy Employee should pay Employee pay Increase in employee rent Eskom pay

865 161 5 719 1018 1373 250 299 355 1237 1107

1358 1446

1394 1331

Market rental (level 2/3 house) Rental subsidy Employee should pay Employee pay Increase in employee rent Eskom pay Market rental (level 3/4 house) Rental subsidy Employee should pay Employee pay Increase in employee rent Eskom pay Market rental (level 4 house) Rental subsidy Employee should pay Employee pay Increase in employee rent Eskom pay

1200 501 699 35 1165

1320 535 785 79 44 1242

1452 573 879 220 141 1232

1597 643 954 382 162 121 6 1331 538 793 317 140

1757 660 1097 603 222 1154 1464 576 888 488 171 976

1933 2126 710 1223 765 136 1 856 1157 253 301 969

2338 825 1513 1513 356 825 1949 715 1234 1234 292 715 1559 604 955 955 229 604

1077

1000 1100 1210 442 558 32 968 800 383 417 32 768 472 628 63 31 1037 880 407 473 47 5 833 503 707 177 114

161 1772 1 618 664 993 1108 695 942 207 247 915 830

1033 1014 968 1065 433 535 134 86 834 462 603 241 107 824

117 1288 1417 1 492 526 563 679 762 854 373 533 726 132 160 193 798 755 691

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Market rental (level 5/6 house) Rental subsidy Employee should pay Employee pay Increase in employee rent Eskom pay Market rental (level 5/6 house) Rental subsidy Employee should pay Employee pay Increase in employee rent Eskom pay Market rental (hostel/S.Q.) Rental subsidy Employee should pay Employee pay

600 319 281 16 584 400 233 167 16 384 300 178 22 2

660 339 321 32 16 628 440 254 186 19 3 421 330 194 136 14

726 360 366 92 59 635 484 275 209 52 34 432 363 213 150 38

799 383 416 166 75 632 532 295 237 95 43 438 399 232 167 67

878 407 471 259 93 619 586 314 272 150 55 436 439 254 185 102

966 433 533 373 114 593 644 334 310 217 67 427 483 274 209 146

1063 461 602 512 139 551 709 355 354 301 84 408 531 295 236 201

1169 492 677 677 165 492 779 377 402 402 101 377 585 314 271 271

Increase in employee rent Eskom pay Market rental (hostel/S.Q.) Rental subsidy Employee should pay Employee pay Increase in employee rent Eskom pay

12 298 200 122 78 2 198 316 220 133 87 9 7 211

24 326 242 146 96 24 15 218

29 333 266 159 107 43 19 223

35 337 293 174 119 65 23 227

45 337 322 190 132 92 27 230

54 331 354 208 146 124 32 230

70 314 390 227 163 163 39 227

Note Market rental increase by 10% per year 14 04(20)


EFFECTIVE FROM 1 JULY 2005

16.

EXAMPLES OF THE CALCULATION OF INCREASED RENTAL PAYMENTS WITH EFFECT FROM JANUARY 1996 Example 1 Employee's basic salary per month (M/P) 25% of employees basic salary Rental subsidy based on 25% of employee's basic salary Market-related rental Rental subsidy on Market-related rental Rental payment = 10% (1 100-472) = R63 per month Example 2 Employee's basic salary per month (CU) 25% of employee's basic salary Rental subsidy based on 25% of employee's basic salary Market-related rental Rental subsidy on Market-related rental Rental payment = 10% (1 100 - 472) = R63 per month Example 3 Employee's basic salary per month (CL) 25% of employees basic salary Rental subsidy based on 25% of employee's basic salary Market-related rental Rental subsidy on Market-related rental Rental payment = 10% (1 100-472) = R63 per month Example 4 Employee's basic salary per month (BU) 25% of employees basic salary Rental subsidy based on 25% of employee's basic salary Market-related rental Rental subsidy on Market-related rental Rental payment = 10% (1 100-472) = R63 per month R2 812 R 703 R 503 R1 100 R 472 R4 204 R1 051 R 642 R1 100 R 472 R5 222 R1 305 R 742 R1 100 R 472 R7 168 R1 792 R 935 R1 100 R 472

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Example 5 Employee's basic salary per month (BL) 25% of employees basic salary Rental subsidy based on 25% of employee's basic salary Market-related rental Rental subsidy on Market-related rental Rental payment = 10% (880-407) = R47 per month Example 6 Employee's basic salary per month (AAA) 25% of employees basic salary Rental subsidy based on 25% of employee's basic salary Market-related rental Rental subsidy on Market-related rental Rental payment = 10% (660-339) = R32 per month 17. EXAMPLES OF PRIVATE RENTAL SUBSIDY CALCULATIONS FOR 1996 NB: The lower of the rental subsidy based on 25% of employees salary and the rental subsidy based on Market-related rental will be paid to the employee. R1 664 R 416 R 383 R 660 R 339 R2 136 R 534 R 433 R 880 R 407

Example 1 Employees basic salary (M/P) 25% of employees basic salary Rental subsidy based on 25% of employee's basic salary Market-related rental Rental subsidy on Market-related rental * Rental subsidy for 1996 R7 168 R1 792 R 935 R1 100 R 472 R 472

Example 2 Employees basic salary (CU) 25% of employee's basic salary Rental subsidy based on 25% of employee's basic salary Market-related rental Rental subsidy on Market-related rental * Rental subsidy for 1996 R5 222 R1 305 R 742 R1 100 R 472 R 472

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EFFECTIVE FROM 1 JULY 2005

Example 3 Employees basic salary (CL) R4 204 25% of employees basic salary R1 051 Rental subsidy based on 25% of employee's basic salary R 642 Market-related rental R1 100 Rental subsidy on Market-related rental R 472 * Rental subsidy for 1996 R 472

Example 4 Employee's basic salary per month (BU) 25% of employees basic salary Rental subsidy based on 25% of employee's basic salary Market-related rental Rental subsidy on Market-related rental * Rental subsidy for 1996 R2 812 R 703 R 503 R1 100 R 472 R 472

Example 5 Employee's basic salary per month (BL) 25% of employees basic salary Rental subsidy based on 25% of employee's basic salary Market-related rental Rental subsidy on Market-related rental * Rental subsidy for 1996 R2 136 R 534 R 433 R 880 R 407 R 407

Example 6 Employee's basic salary per month (AAA) 25% of employees basic salary Rental subsidy based on 25% of employee's basic salary Market-related rental Rental subsidy on Market-related rental * 18. Rental subsidy for 1996 R1 664 R 416 R 383 R 660 R 339 R 339

CRITERIA FOR THE ALLOCATION OF VACANT HOUSES The following criteria will take effect from 1 January 1996: 18.1 Qualification criteria Subject to the availability of family accommodation any permanent employee, as defined in Eskoms service conditions, qualifies to rent any Eskom house, excluding: 18.1.1 employees who have a Home Ownership Scheme loan; 14 04(23)
EFFECTIVE FROM 1 JULY 2005

18.1.2 employees and their dependants who will not personally reside in the accommodation. 18.2 Monthly rental payable 18.2.1 Employees currently living in Eskom houses will keep on paying their present rental until 31 December 1995, after which the rental as per the new Accommodation Policy will apply. 18.2.2 An employee currently residing in Eskoms single accommodation and moving into a house will pay the current rental applicable to the house into which he moves from January 1996 he will pay the phased rental as per this Accommodation Policy. 18.2.3 Employees not currently residing in Eskom accommodation but who will now move into Eskom accommodation will pay the phased rental as per year 7 of the Accommodation Policy, i.e. means the full market-related rental minus the subsidy calculated as per paragraph 5.13.4. 18.3 Allocation of houses 18.3.1 Preference will be given to employees with dependants and only if there are no employees with dependants on the waiting list will accommodation be allocated to single employees. 18.3.2 Management and trade unions shall discuss at BU level which of the vacant houses, if any, should be kept vacant to facilitate transfers of employees. 18.3.3 All Eskom employees applying for housing shall do so in the area where they work and houses will be allocated in accordance with the criteria in 18.3.4. An employee currently occupying a house may, subject to the payment of the agreed cost, apply to move to a house at the same or a higher level than his present house. A move to a house at the same level shall be motivated by the employee and discussed by the Regional Housing Steering Committee. 18.3.4 Houses will be allocated in accordance with the following criteria: Applicants will be allocated points and houses will be allocated by starting from the employee with the most points and proceeding to the employee with the least points. Points will be allocated as follows: One point for every completed year of Eskom service and one point for every dependant. 14 04(24)
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Residential properties will administer the waiting list and will update the waiting list every quarter.

18.3.5 Where Eskom houses are required to house Eskom employees, private individuals will be given notice in terms of their contracts. They will be given notice in the following order. (a) (b) (c) (d) (e) Individuals not in any way attached to, or rendering a service to Eskom. Contractors rendering a service to Eskom, excluding Rotek. People rendering community services, e.g. post office, shops and municipality. People rendering a critical community service, eg. police, medical, health and education service. Eskom pensioners.

18.3.6 Houses allocated per contract to coal mines supplying coal to Eskom are not regarded as Eskom houses. 18.3.7 This process will be coordinated by Housing Committees comprising members from the various Eskom Groups and all the trade unions. 18.4 Personal Housing Loans An employee who has an existing Personal Housing Loan will be allowed to apply for a house, but once an employee has received a rental subsidy for a house he will not be eligible for a future Personal Housing Loan.

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