Eskom reports alarm Cosatu

The federation held a special central executive committee meeting in Johannesburg this week at which it resolved to oppose any attempts to privatise state-owned entities. (Delwyn Verasamy/M&G)

The federation held a special central executive committee meeting in Johannesburg this week at which it resolved to oppose any attempts to privatise state-owned entities. (Delwyn Verasamy/M&G)

Labour federation Cosatu says it will demand answers from President Cyril Ramaphosa’s administration on alleged plans to privatise Eskom despite assurances that the power utility would remain state-owned.

The federation held a special central executive committee meeting in Johannesburg this week at which it resolved to oppose any attempts to privatise state-owned entities (SOEs), because it believed this would lead to more job losses and the casualisation of workers.

“It will also adversely affect the state’s capacity to: provide basic services to the poor; provide for infrastructural development; intervene to restructure the economy to ensure growth and employment creation; and play a developmental role in general,” Cosatu said in a statement.

Last week, the Sunday Independent reported that Eskom’s executives were mulling over their options to save the SOE, because the power utility’s debt is now more than R300-billion. Eskom confirmed that privatisation was one of the options being discussed as well as “unbundling” the utility into separate divisions, each responsible for generating income. It said any plans would be discussed with the unions.

Speaking to the Mail & Guardian on Wednesday, Cosatu general secretary Bheki Ntshalintshali said the federation would not be open to any solution involving privatisation.

He said at a meeting with Energy Minister Jeff Radebe and Public Enterprises Minister Pravin Gordhan that the idea of unbundling Eskom into three divisions had been discussed.
“But when we asked the question about privatisation they said there was no issue.”

He said Cosatu would “go to government and say ‘Here are the rumours, tell us what we need to know. And you can’t keep secrets — has the board decided on those issues?’ If it is to be confirmed, we will resist it very clearly.”

The ANC has hinted at inviting private investment to save SOEs, but not going the extent of privatisation. At the Cape Town Press Club in July, ANC treasurer general Paul Mashatile suggested that privatisation would only be considered if an SOE was beyond being saved.

Deputy Finance Minister Mondli Gungubele told the M&G in August that the government had agreed to sell the assets of some SOEs and, with others, allow private equity to boost revenues and service debt.

“We have steered away from privatisation. Equity investment will be minority stakes rather than complete outsourcing, except when a particular government agency has no chance of being revived,” Mashatile said.

“Even at [the ANC] lekgotla, the president [Ramaphosa] was very clear that we are open now to private equity partners if it can improve [the financial situation in SOEs],” Gungubele said.

“I am asking one question: If an asset is a burden to the state, it adds no value. Why do you torture the state with the keeping of that asset because the translation is that the burden of the cost of that asset translates [into] the inability of the state to provide services to the poor?” he said.

But Ntshalintshali said ANC policies clearly favoured public ownership. He believed the Eskom board, which has a strained relationship with Cosatu, was to blame for showing no real commitment to saving jobs.

“The board is doing something that is not part of a clear mandate that they have … Some of the people have no respect for job creation. They’re just looking at turning the organisation around to make money irrespective of the damage.” — Additional reporting by Matuma Letsoalo

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