COSATU welcomes President Cyril Ramaphosa’s assenting to and the promulgation of the Eskom Debt Relief Amendment Act
10 April 2024
The Congress of South African Trade Unions (COSATU) welcomes President Cyril Ramaphosa’s assenting to and the promulgation of the Eskom Debt Relief Amendment Bill.
COSATU supports the Eskom Debt Relief Amendment Act. The Federation long championed the need for the Fiscus to take over Eskom’s unsustainable debt levels as part of a package of measures to enable Eskom to be stabilised, rebuilt and play its role supporting economic growth.
Eskom is the nation’s most important economic asset. It generates 95% of electricity and transmits and distributes 100%. The entire economy, including all jobs and the ability of workers to earn a salary and take care of their families depend upon a functioning and modern Eskom. Eskom is simply too big to fail.
Eskom for a variety of reasons incurred debts it cannot afford to pay. Some are due to rampant theft and corruption, in particular at Medupi and Kusile. Some to mismanagement, institutional neglect and a lack of investment. Others to aging infrastructure and high levels of debts owed to Eskom by municipalities, businesses, communities and even government entities.
COSATU first proposed in October 2019 that government take over at least half of Eskom’s debt burden. We are pleased government led by the African National Congress heeded this call and adopted a plan to settle two thirds of Eskom’s debt burden at R253 billion. This is in addition to the previous debt relief the Fiscus had provided for Eskom in previous years’ budgets. COSATU’s proposals for a comprehensive plan to stabilise and rebuild Eskom were encapsulated in the Eskom Social Compact signed at Nedlac in December 2020 by government and social partners.
We support the objectives of the Eskom Debt Relief Act and the relief it is providing to Eskom. The relief is helping Eskom shift resources to ramping up its maintenance programme. This is the fastest way to ending loadshedding and thus ease the burdens on workers, their families, businesses, the economy and the fiscus. It will provide Eskom the support it needs to ramp up maintenance and end loadshedding.
The current focus on ramping up maintenance is critical to ending loadshedding but must equally be balanced with supporting Eskom to invest in its own new generation capacity. This is key to ensuring the chapter of loadshedding is finally overcome.
COSATU agrees with the Act’s highlighting the need to tackle the rising levels of municipal debt. Government needs to development a comprehensive plan to tackle this existential fiscal threat to Eskom’s sustainability.
Treasury needs to assist Eskom to plug its fiscal leakages and develop an accurate cost reflective regime that does not budget for corruption and wasteful expenditure. Law enforcement organs must play their role in supporting Eskom to tackle the criminality and corruption crippling it.
Double digit tariff hikes are not sustainable and threaten the ability of the economy to grow and deplete workers’ salaries. The Federation will continue engaging with government on these matters to ensure Eskom is provided the necessary support it needs to rebuild its generation capacity and end loadshedding.
Issued by Matthew Parks, Acting National Spokesperson, COSATU, 10 April 2024
