President Cyril Ramaphosa is reportedly about to target the pensions of working and retired teachers, nurses, police officers and all other civil servants to bail out Eskom.
According to the Trade Union Federation, the bold proposal by Cosatu to relieve Eskom of close to 60% of its debt using pension money may reportedly be presented by President Cyril Ramaphosa in this week’s State of the Nation Address (SONA).
The proposal, which comes with a number of tough conditions, was discussed and received a “massively positive response” at the National Economic Development and Labour Council (Nedlac) meeting by business, government, labour, and community social partners on Wednesday 5 February.
The plan would allegedly see the Public Investment Corporation (PIC), that manages pensions on behalf of the Government Employees Pension Fund, the Development Bank of Southern Africa, the Industrial Development Corporation and private lenders take R254 billion off of Eskom’s books.
The Congress of South African Trade Unions, a key ruling party ally, is pushing senior members of the government to consider its proposals to rescue the state’s indebted power utility before next month’s budget.
In addition to suggestions made in November, Cosatu wants the government to consider making it mandatory for private pension funds to invest part of the money they control in infrastructure.
Cosatu’s proposal to use government pension funds and development bank finance to slice Eskom’s debt in half is gaining traction and has conditional approval from President Cyril Ramaphosa and government as well as, surprisingly, some support from business.
The labour federation also says the Public Investment Corporation could fork out R250-billion to save the ailing power utility but this, in turn, could mean taxpayers will have to be liable for another troubled state-owned entity. The state-owned entity currently has a total debt of R450-billion.
