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The opposition Democratic Alliance (DA) party announced on Saturday that it plans to oppose a proposal to use civil servants’ pensions to reduce Eskom’s debt of more than 500 billion rand.
The shadow minister of DA Empresas Públicas, Ghaleb Cachalia, said in a statement that despite the fact that the holder of Eskom’s debt, Futuregrowth Asset Management, the Public Investment Corporation (PIC) was contacted by the National Treasury to convert about R95 billion of Eskom’s debt held by the PIC. in fairness.
Earlier this year, Cosatu published a bold proposal to relieve Eskom of about 60% of its debt using pension money.
The plan would see PIC, which administers pensions on behalf of the Government Employees Pension Fund (GEPF), the Southern African Development Bank, the Industrial Development Corporation and private lenders, take R254 billion from the Eskom books.
Public Companies Minister Pravin Gordhan said the government had a “total commitment” to act within the provisions of the social pact signed in Nedlac on Tuesday, which is an endorsement of Cosatu’s proposal to use the servants’ pensions. to reduce Eskom’s debt of more than R500. billion.
READ ALSO: Social pact signed to use government workers: compensation for Eskom’s debt
It has been argued that Cosatu’s proposal lacks a “detailed vision of how the funds collected through public servants’ pensions will be returned with interest or how the public companies in question will once again be profitable.”
The national treasury has already budgeted 59 billion rand for Eskom on top of the current medium-term budget which could be used, in part or in full, to provide the guaranteed return to the PIC.
Cachalia says Eskom’s majority debt of about R350 billion is already guaranteed by the South African government and the swap could put Eskom in technical default.
READ ALSO: Cosatu is right about the PIC and Eskom funds
“The Democratic Alliance (DA) will oppose this desperate move that will continue to prevent anyone from having an opinion on how the money is spent, as a rapprochement with the IMF would imply. The reality is that state-owned companies have failed and must be sold, which allows the government to reduce its wage bill and foster an environment conducive to investment and job creation, ”said Cachalia.
Adding that the party will discuss the issue with global and local experts in the field of an electricity company and debt management.
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