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Business Report writes that analysts at Mazars, a global audit, accounting and consulting group cautioned on Tuesday that fiscal prudence would be needed in using government employees’ pension savings to bail out Eskom’s R454 billion debt.
Trade union federation Cosatu has proposed the use of government-administered pension funds as a means to alleviate the financial burden at the state-owned power utility. Eskom’s balance sheet has been in the red for a number of years and the power utility expects to report repeated losses of about R20billion this financial year. Bernard Sacks, a tax partner at Mazars, noted that there was no inherently right or wrong answer in the kind of arrangement proposed. He said the litmus test for dipping into workers’ pension savings should be the potential return that could be generated by investing in a company like Eskom. “The question that I would have is to what extent are you going to get a return, certainly in the short term, on that investment. That will also have to be accompanied by operational improvements, as well as greater financial discipline, because I think that discipline has been lacking,” Sacks remarked. Cosatu wants the Public Investment Corporation (PIC) and state lenders to take over at least R254bn of Eskom’s debt. Cosatu notes that the PIC is already exposed to Eskom to the extent of R95bn, and the intervention would be about securing the money that has already been invested there. “This is a moment of national crisis and we need social compact on how to save Eskom and the economy,” Cosatu said in its key economic interventions and proposals document.
- Read the full original of the report in the above regard by Siphelele Dludla at Business Report
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