The Congress of South African Trade Unions (Cosatu) has warned that failure to get Eskom out of its current debt trap could have dire consequences for the entire economy.
The federation says should Eskom fail – companies listed on the Johannesburg Stock Exchange (JSE) would follow suit, collapsing the entire economy.
Cosatu’s Parliamentary Coordinator Matthew Parks was briefing the Portfolio Committee on Public Enterprises on Wednesday.
He explained the federation’s proposal for the Public Investment Corporation (PIC) to invest some of its profits in the power utility to remove over R250 billion from Eskom’s debt book.
Parks dismissed suggestions that Cosatu wants pension monies to be given to Eskom.
“We are also looking at having the Public Investment Corporation (PIC) becoming an equity partner in Eskom. The PIC is a state-owned entity. If it can be an equity partner it will get a seat at the Eskom board at the table. It can force Eskom to restructure to clean up…to act against corruption and wasteful expenditure among other things,” explains Parks.
Opposition to Cosatu’s proposal
The Democratic Alliance (DA) vehemently opposes Cosatu’s bid to use R254 billion from the PIC to clear half of Eskom’s debt.
The official opposition says it will soon write to Finance Minister Tito Mboweni and CEO of the PIC Vuyani Hako regarding the issue.
The party wants the duo to publicly reject the proposal as it would, according to the DA, resulting in billions of rands in state employee pension funds being redirected to bail out a collapsing and defunct Eskom.
Cosatu says if the PIC money is made available to assist the ailing power utility, Eskom should not be privatized; no jobs should be lost and the state should take a lead on renewable energy.
Trade union Solidarity has, on the other hand, threatened legal action should the pensions of government employees be used to cut Eskom’s R450bn debt burden.
The union says the move would be in breach of the PIC mandate and amounted to “pension capture”.
On Tuesday, President Cyril Ramaphosa hinted that the savings of pension funds could be used to meet some of Eskom’s debt obligations.
Ramaphosa made the remarks at a briefing with the South African National Editors’ Forum (Sanef) in Cape Town.