DA: Pensions should be off limits until Eskom shapes up

(Gallo Images)
(Gallo Images)

Opposition party the Democratic Alliance is prepared to go to the highest court in the land to stop government from accessing employees' pensions in a bid to provide assistance to beleaguered power utility, Eskom. 

This is according to DA MPs, who spoke to reporters in the precinct of Parliament on Wednesday. 

The Congress of South African Trade Unions in February proposed a "special purpose vehicle" that would use monies from the Government Employees Pension Fund, through the Public Investment Corporation and other state-owned developmental institutions, to take over R250bn of Eskom's R450bn debt obligations.

In a media briefing to reporters on the steps of the National Assembly, DA MPs Natasha Mazzone, Kevin Mileham and and Ghaleb Cachalia said they were dead against the plans and were consulting with their lawyers about finding ways to stop what they called the irresponsible management of valuable funds.

Mazzone said the only way the DA would accept any plan to invest government pensions into Eskom would be if government implemented far-reaching reforms at Eskom, including tackling an governance challenges, financial leakages and an operational crisis that has resulted in load shedding.

'Don't touch a cent'

"Rather let's ask the president to keep quiet about using anyone's pension until we have a firm and fast idea on the table, and in the interim we as the DA will make sure that you don't touch a cent of pension money, until we are convinced that it is a safe and secure investment to be made," said Mazzone.

Mileham said parties opposed to the DA's approach in Parliament misunderstood the party's actions as attempts to privatise electricity provision in South Africa. Rather, Mileham said, it was about protecting the funds of public servants and taxpayers from the continued mismanagement of Eskom.

Investors had the right to question what they were investing in, he argued.

"If they're going to invest in an IPP [independent power producer], they're going to look at its financials, track record and ask if it can do the job or has a licence. They would invest a company that meets those criteria as a viable option. We're not saying don't invest in the electricity sector. We are saying don't invest people's pensions in Eskom," said Mileham.

'Investors waiting to invest'

Cachalia said how government addressed electricity crisis in South Africa would reverberate through the global investment community, and that investors would respond in kind.

"It's one of the most profitable sectors in the world. There are investors waiting to invest under the right conditions. But they will not invest under the wrong conditions. They will not invest in plants that are broken. They will not invest in plants where technology must be cleaned and cost more than the plant. That makes no sense to me, let alone an investor," said Cachalia.

Mazzone said she believed President Cyril Ramaphosa's messages regarding how government plans to assist Eskom were ambiguous, and only caused more harm.

"When the left hand isn't speaking to the right hand, this is what you get. When the president, the minister of energy and the minister of public enterprises are working in three separate silos and none of them can agree on anything. That creates a sense of panic in the country because no one in government understands what each department is trying to do," said Mazzone.

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