We are in the dark about Cosatu plan to use our money to save Eskom, says govt pension fund

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(Gianluigi Guercia, AFP)
(Gianluigi Guercia, AFP)

The Government Employees Pension Fund says it has not been consulted about a plan floated by the Congress of South African Trade Unions to rescue Eskom, after the federation's proposal had reportedly been welcomed by government and business.

With a debt burden of around R450 billion, Eskom's financial woes have been described as the single biggest threat to the country's struggling economy, and the power utility has instituted rotational blackouts which have taken a toll on households and businesses. 

As part of a strategy aimed at preventing the collapse of the company and possible job losses, Cosatu has come up with a proposal to reduce Eskom's debt by some R250 billion through the creation of a "special purpose finance vehicle". The proposal would see the Public Investment Corporation, the Industrial Development Corporation and the Development Bank of Southern Africa providing financial assistance to the power utility.

The PIC - Africa's largest asset manager - manages over R2 trillion in investments, and the GEPF is its biggest client. 

'Not consulted'

The GEPF said on Friday it "has not received such a proposal, nor has it been consulted on the Cosatu proposals or any other proposals to reduce Eskom debt".

"If the GEPF is approached with a proposal that requires investing in Eskom, such a proposal must will be considered on its merits in the best interests of members, pensioners and beneficiaries."

Trade union federation Cosatu earlier said the plan had been "in essence" accepted by government, unions and business.  

Eskom has over the last decade racked up massive debt from local and international lenders to support its build programme and the bulk of its debt is guaranteed by the government.

Some of the 26 key points that Cosatu included in its proposal, which it used as a basis for discussions, were the inclusion of workers on the Eskom board, the establishment of a panel to scrutinise major contracts, no retrenchments and a comprehensive skills audit of the entire Eskom payroll.

This month, the Developmental Bank of Southern Africa extended a R3.5bn loan to state-owned airline SAA, which met with mixed reviews. The airline is currently in business rescue, after years of operating at a loss.                             

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