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Eskom Social Compact framework signed at Nedlac, but DA says it’s a ‘bailout by stealth’ which ignores the GEPF

Details

nedlacBL Premium reports that on Tuesday business, labour and the government kicked Eskom’s R488bn debt problem down the road as they signed a framework agreement detailing a set of broad rescue measures to stabilise the power utility.  

The Eskom Social Compact framework agreement was signed at the annual National Economic Development and Labour Council (Nedlac) summit.  It sets out a range of interventions to turn around Eskom, which relies on government bailouts as it does not generate enough cash to service its mountain of debt.  “Social partners are committed jointly to mobilising adequate financial resources for Eskom.  The precise financing mechanisms will be evaluated taking into account all options available,” the document reads.  Even though the signed framework has no specific details on how the money will be raised, it does indicate that financial institutions must comply with investor mandates and honour their fiduciary duties.  But, DA shadow finance minister Geordin Hill-Lewis pointed out that the framework agreement ignores the Government Employees Pension Fund (GEPF), which currently holds R104bn in Eskom debt.  He said attempts by the GEPF to write off its debt in Eskom and to add an additional R100bn would be illegal.  “The GEPF is unlikely to ever be able to approve such an obviously bad investment, because this will be contrary to their fiduciary duty to their members,” said Hill-Lewis.  He also characterised the agreement as a sham and a “bailout by stealth”.  Cosatu parliamentary co-ordinator Matthew Parks, however, said no commitment had been made on how much should be extended to Eskom.

  • Read the full original of the report in the above regard by Luyolo Mkentane at BusinessLive (paywall access only)
  • Read too, Eskom is a strategic asset that must be stabilised, says deputy president, at BusinessLive (paywall access only)
  • And also, Government signs Eskom social compact, at Business Report


Get other news reports at the SA Labour News home page