Cosatu ‘will defeat’ any state bid to privatise Eskom

2014-08-06 14:36

Cosatu has vowed to fight “to the bitter end” any attempts to privatise Eskom.

“The Congress of South African Trade Unions is not surprised by media reports that there are moves within the government to privatise Eskom,” spokesperson Patrick Craven said.

“This is a continuation of an agenda started in the late 1990s when the government scaled down investment in the electricity sector with the hope that the private sector would invest in it.”

Yesterday, Business Day reported that a team of Cabinet ministers and government officials were looking into restructuring Eskom’s business.

This included selling some of its power stations to private investors.

The options being discussed by the ministerial team representing energy, public enterprises and the national treasury have not been made public.

Public Enterprises Minister Lynne Brown was quoted as saying it would be “premature to make pronouncements until completion of the process”.

Brown said: “I want to indicate that there is a portfolio of options for the inter-ministerial task team to consider.

To my knowledge Cabinet has not discussed the matter of privatisation and there is no need to unnecessarily raise temperatures around this matter.”

She added that it would be a grave mistake to privatise Eskom.

On July 28, the power utility painted a gloomy picture of its books, telling MPs it faced a R225 billion revenue shortfall, partly as a result of being granted lower-than-expected tariff increases by the National Energy Regulator.

Eskom has been asking for an equity injection of at least R50 billion to solve its cash flow problems.

On July 30, the energy regulator announced it had approved the regulatory clearing account, paving the way for Eskom to raise electricity tariffs next year.

The account is a regulatory mechanism that allows Eskom to adjust for over- or under-recovery of revenue, because initial price determinations are based on projections and assumptions.

Craven said the calls indicated that the “1996 class project agenda” had not been exorcised completely.

“This calls for maximum vigilance by progressive forces,” he said.

“It can’t fit into the agenda of the second phase of radical transformation [in the African National Congress’s second term of office] and must be defeated.”

He said electricity was critical for transformation.

“We will not hesitate to mobilise our members to defeat these remnants of the 1996 class project.”

The 1996 class project is defined as the emergence of a small group of influential black people who used the state as a way of accumulating power.

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