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Labour body resists splitting of Eskom

February 9, 2019 7:28 am by: Category: BUSINESS, Energy, Featured, Finance & Banks, Investing, Local, Mining & Engineering, National, NEWS Leave a comment A+ / A-
Cosatu headquarters

Cosatu headquarters

by SAVIOUS KWINIKA
JOHANNESBURG – THERE are differences within South Africa’s  tripartite alliance following the announcement by President Cyril  Ramaphosa of plans to privatise state-owned enterprises (SOEs).

Despite some of these parastatals plagued by corruption and under-performance, the Congress of South African Trade Unions (COSATU), opposed the privatisation plans arguing this would result in job losses.

COSATU was reacting to Ramaphosa’s State of the Nation Address (SONA) on  Thursday, during which the president announced the unbundling of power utility Eskom into three divisions comprising Generation, Transmission and Distribution.

“It is clear that the only solution by the government is to punish the real victims of corruption in the SOE’s, the workers,” COSATU spokesman, Sizwe Pamla told CAJ News Africa.

“We want to make it very clear that we will oppose any privatisation of strategic assets like Eskom. We have a clear and unambiguous position on the issue of privatisation of state assets,” Pamla added.

He said the federation would rather encourage “engagement” with regard to the restructuring of Eskom.

“There is no just-transition that can be rushed. We will flatly reject any solution or policy that will be unilaterally imposed and that will bring more misery to the already struggling workers,” Pamla said.

COSATU is a member of the tripartite alliance alongside the ruling African National Congress (ANC) and South African Communist Party (SACP).

Delivering the annual SONA, Ramaphosa, said the unbundling of Eskom would bring credibility to the turnaround and to position South Africa’s power sector for the future.

The president insisted this would isolate costs to each entity and enable Eskom raise funding easily from the markets.

“It is imperative that we undertake these measures without delay to stabilise Eskom’s finances, ensure security of electricity supply and establish the basis for long-term sustainability,” Ramaphosa said.

Eskom has a total debt burden of R420 billion.

Rand Merchant Bank (RMB) stated Ramaphosa offered stern words of warning if the failing operational and financial health of the utility was left unchecked.

“The government is acutely aware that Eskom’s instability poses a risk to the country and decisive actions cannot be delayed,” the firm stated.

South Africa will have to wait until the Budget Speech on February 20 for details around Eskom but the government will support the company’s balance sheet.

“It is to be done without burdening the fiscus with unmanageable debt, while considering both the impact on the sovereign rating to the rights and obligations of funders,” RMB commented.

– CAJ News

Labour body resists splitting of Eskom Reviewed by on . [caption id="attachment_10406" align="alignleft" width="300"] Cosatu headquarters[/caption] by SAVIOUS KWINIKA JOHANNESBURG - THERE are differences within South [caption id="attachment_10406" align="alignleft" width="300"] Cosatu headquarters[/caption] by SAVIOUS KWINIKA JOHANNESBURG - THERE are differences within South Rating: 0

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