Business body working with Cosatu, others on Eskom plan ahead of SONA


South Africa’s main business lobby said it’s working with labour unions and other social partners on enabling President Cyril Ramaphosa to announce a pact to rescue the debt-stricken state power utility in his state-of-the-nation address next week.

Representatives of Business Unity South Africa and the Congress of South African Trade Unions, the nation’s biggest labour federation, said significant progress has been made in talks with the government on Eskom's R450bn debt burden.

“We all recognise pragmatically what needs to be done,” Busa Vice Chairman Martin Kingston said in an interview. There’s an objective to “ensure that all parties are on the same page as to what is practical and what is possible.”

Cosatu has proposed that Eskom’s debt be cut to R200bn by using funds from state development institutions and the Public Investment Corp., which oversees R2.13trn of mainly government worker pensions.

BUSA has insisted that any arrangement respect the principle of adequate reward for capital put at risk, that the mandates of the institutions concerned aren’t breached and the fiduciary duty of trustees isn’t compromised.

Ramaphosa is scheduled to deliver his annual address to lawmakers on 23 February.

“We would hope that the president could refer to mechanisms - short-, medium- and long-term” - to rescue Eskom, he said. There is “the issue of ensuring we can mobilise sufficient financial resources to fund projects going forward and alleviate the strain on the balance sheet.”

Framework agreement

It’s likely that a “framework agreement” will be completed and signed within the next “couple of days,” said Matthew Parks, Cosatu’s parliamentary co-ordinator.

The private sector is unlikely to risk more capital on Eskom unless there is a major restructuring of its balance sheet and operating model, Kingston said. Much of Eskom’s current debt is guaranteed by the government.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
Rand - Dollar
Rand - Pound
Rand - Euro
Rand - Aus dollar
Rand - Yen
Brent Crude
Top 40
All Share
Resource 10
Industrial 25
Financial 15
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot