President Cyril Ramaphosa is “favourably disposed” to Cosatu’s proposal that would see the Public Investment Corporation, the Industrial Development Corporation and the Development Bank of Southern Africa take on R254 billion of Eskom’s debt, his spokesperson told Reuters on Wednesday.
On Monday, Cosatu presented its proposal to rescue Eskom to government representatives and business leaders at the National Economic Development and Labour Council (Nedlac). Business Unity South Africa welcomed Cosatu's proposal, calling it a "constructive approach".
In his response, Ramaphosa said “there needed to be a broader discussion around how financial institutions invest their money, since a relatively small portion of their funds were being directed to developmental projects,” his spokesperson Khusela Diko told Reuters.
But Ramaphosa also believes that taking on Eskom’s debt should not undermine the investment mandates or fiduciary duties of the PIC, the IDC and the Development Bank, Diko said.
In exchange for the R254 billion from the PIC, the IDC and the Development Bank, Cosatu outlined 26 “fundamental” conditions for the funding.
- No Eskom employees must be retrenched.
- Those who have looted from Eskom must be arrested and their assets seized.
- Coal suppliers and IPP generation contractors must be forced to reduce their prices.
- Eskom must be able to generate its own renewable energy.
- A comprehensive debt recovery plan be implemented to recover the billions owed by departments, SOEs, municipalities, communities (including Soweto) and consumers at large. “There must be no exceptions. Treasury must simply deduct monies owed to Eskom by Departments, SOEs and Municipalities from their budget allocations and directly transfer it to Eskom,” Cosatu says.
- A single payment account be established for all consumers to pay Eskom directly – bypassing municipalities.
- The free electricity allocation to indigent households should be increased.
- A proper staff audit must be conducted to determine if and where Eskom is bloated. "This must include what services are still being outsourced and if they should be outsourced," Cosatu says.
- There must be worker representation on the Eskom Board.
- All buildings in SA must be required to install locally produced solar panels over a 5-year period.