FEDUSA Rejects Proposed R254 Billion Debt Write – Off and Calls for Eskom to be Placed Under Business Rescue
08 February 2020
The Leadership of the Federation of Unions of South Africa (FEDUSA) gathered today in Johannesburg to stage a Special National Executive Committee (NEC) Meeting to deliberate on the crisis currently ravaging State – Owned Enterprises (SOEs) with a focus on Eskom. The FEDUSA NEC was unanimous in the resolutions it adopted and made the following pronouncements.
- The Federation is fully supportive of the bona fide intentions and proposals made by various constituencies to save Eskom and a framework that can support State Owned Enterprises (SOE’s). However, these proposals cannot be advanced at the expense of workers ;
- FEDUSA cannot support the notion of continuously throwing money into a black hole, as the unsustainable debt levels at Eskom has deemed the entity insolvent ;
- FEDUSA rejects the proposal to raid R254 billion of public servants pension money warehoused in the Public Investment Corporation to bail-out the utility, considering that the GEPF had already invested R85 billion in Eskom, leaving the Fund with R29 billion in “cash and cash equivalents”. The GEPF will thus have to sell some good assets to provide the cash that continues to be eyed ;
- FEDUSA is totally opposed to the reintroduction of a finance model that the state will use to build infrastructure and other developmental projects. Henceforth FEDUSA does not support Regulation 28 that promotes the reintroduction of prescribed assets that were scrapped in 1989. Instead, FEDUSA wants the state to issue Government Bonds to raise money for relieving Eskom of its debt burden.
- However, a prerequisite to the aforementioned recommendation on the issuing of Government Bonds, is thus the fundamental restructuring of the utility’s Business Model, including Business Rescue to make it sustainable, without recklessly throwing money at what is essentially an operational model.
- Henceforth, FEDUSA will amplify its call for Eskom to be placed under Business Rescue to ensure that a proper turn around strategy can be sought, like the process that SAA is currently subjected to. This will ensure that outside and undue political interference in its operations and governance is prevented. A skilled and capable institution with solid competencies can only re-instil confidence in Eskom’s already dismal institutional rating. FEDUSA will support all efforts to skills, reskill and upskill the entity’s workforce to ensure greater institutional capacity instead of a brain drain that leaves the doors wide open for further compromise and sabotage.
- FEDUSA will submit alternative and more viable proposals to address the financial requirements for Eskom, as the Federation’s key focus is in supporting proposals to stabilise the economy to ensure uncompromised energy generation and supply to the country, to reassure investors and ratings agencies.
- Decisive action to address the root of the evil at all SOEs, the destructive levels of corruption and corporate governance failures must be prioritised. FEDUSA wants to see these thieves in orange overalls, with looted funds recovered to ease the pressure on respective balance sheets
“If we do not fundamentally restructure Eskom’s business model to make it sustainable going forward, then the collective FEDUSA membership will be subjecting themselves to the same painful and emotional dilemma of repeatedly bailing out Eskom, without any turn – around in sight, five years from now” said Riefdah Ajam, FEDUSA Acting General Secretary. We are simply not prepared to play Russian roulette with workers livelihood and money. FEDUSA is also strongly considering class action against all municipalities in the country who continue collecting utilities such as electricity and water but fail to deliver on services. FEDUSA will not allow its members nor South African’s to be subjected to a double tax burden, at the expense of looters and thieves who unashamedly advance their self – enrichment agenda.
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FEDUSA Acting General Secretary
079 696 2625
FEDUSA Media and Research Officer
072 637 8096
Email: research @fedusa.org.za