Cape Town - The proposal by trade federation Cosatu that the pension funds of public sector employees should be used to settle some of failing power utility Eskom’s debt was “terrible madness”, the Cape Chamber of Commerce said on Thursday.
“When the largest trade union in a country seriously suggests that failing state-owned enterprises (SOEs) should be the recipients of savings in pension funds, one could be forgiven for thinking that magic rather than logic has taken over,” the chamber's deputy chairman, Jacques Moolman, said via an emailed statement.
“If such a country was a family, it would be tantamount to a father raiding his child’s college fund to pay his gambling debts, or cashing in his pension to do the same. Yet, that is what Cosatu has suggested.”
The union earlier this month proposed that R254 billion be taken from the Government Employees Pension Fund to invest in Eskom. The organisation has a debt burden of about R450 billion.
Moolman said that the idea of "raiding pension funds" was worsened by the fact that the utility had caused its own mess and, should the proposal come to fruition, would be "rewarded for its incompetence by dollops of cash taken from other people who had nothing to do with the mess”.
“The cause [of Eskom's dire financial situation] was more than a decade of bad managers who aided and abetted criminal looting either through highly suspect purchasing practices or vast expansions of their own and their staff’s salaries. As for Eskom, throwing more money into the pit will not fill it up. It will just be robbing Peter to pay Paul. In other words, it would be a futile, wasteful gesture,” added Moolman.