Cosatu punts state workers’ pensions to save Eskom
Economy / 6 February 2020, 08:12am / Siphelele Dludla
JOHANNESBURG – Labour federation Cosatu was locked in talks with big business on Wednesday as it continued to negotiate a consensus around its proposal to use government workers’ pension funds to bail out the bankrupt power utility Eskom, in a desperate effort to stave off a Moody’s credit-rating downgrade.
Cosatu said it was ironing out “minor differences” and concerns with big business over the plan.
The proposal was formally tabled at a meeting of social partners at the presidential working committee at Nedlac on Monday, with discussions continuing through yesterday.
Coastu has proposed that the government dips into pensions managed by the Public Investment Corporation (PIC) to pay about half of Eskom’s crippling R454 billion debt.
Cosatu spokesperson Sizwe Pamla said the federation’s key intervention proposals for Eskom were presented to the alliance political council late last year, as well as the January ANC national executive committee (NEC) lekgotla, where they received broad support.
Pamla said other union federations like Fedusa, community organisations and the government were all generally on board with the plan, but big business still had “some areas of concern”.
“When it comes to big business, they agree with the diagnosis and with the principles, and said they were happy with the plan. But they have some areas of concern,” Pamla said.
“We told them we understand and we are prepared to talk about that. But as far as we are concerned we cannot wait, we are pushing to ensure that this is part of the State of the Nation Address (Sona) They are not vehemently opposed to the idea.”
Presidency spokesperson Khusela Diko was not immediately available to comment, replying by text message that she was locked in meetings.
But Diko was quoted in the media as saying that President Cyril Ramaphosa was “favourably disposed” to the proposal.
The proposal is seen as a means to help stabilise and save Eskom and its workers’ jobs, while also ensuring the economy has access to affordable and reliable electricity.
Cosatu wants the PIC, the Development Bank of Southern Africa, and the Industrial Development Corporation to invest in a special purpose vehicle that would house about R250bn of Eskom’s debt.
The PIC manages more than R2trillion in assets, the bulk of which is made up by the government employees’ pension funds.
Pamla said that the federation would be meeting with Ramaphosa after yesterday’s meeting, because the government had to convince international markets that it had a tangible plan for Eskom.
Eskom has been cited as the albatross in the country’s economic growth prospects due to its lack of energy supply and runaway debt.
“We do not have the luxury of time. We have sleepless nights consulting, because Moody’s is going to be giving us a report card at the end of the month,” Pamla said.
“Sona and the Budget are going to be very instrumental to actually convince Moody’s one way or the other. The president cannot miss that opportunity to explain that South Africa has a plan,” she said.