COSATU presented its submission on the Eskom Debt Relief Bill to Parliament today
26 April 2023
The Congress of South African Trade Unions (COSATU) presented its submission on the Eskom Debt Relief Bill to Parliament’s Standing Committee on Appropriations today.
COSATU welcomes the Eskom Debt Relief Bill overall and supports its passage by Parliament. The Federation has 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 stabilized, rebuilt and play the role it is meant to in the economy.
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 depends upon a functioning and modern Eskom. In simple words, Eskom is too big to fail.
For a variety of reasons, the power utility has incurred debts it cannot afford to pay. Some of this is due to rampant theft and corruption, in particular at Medupi and Kusile. Some are due to mismanagement, institutional neglect and lack of investment. Others are due to aging infrastructure. Others are due to rising 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 has heeded this call and adopted a plan to settle two thirds of Eskom’s debt burden at R254 billion. COSATU’s proposals for a comprehensive plan to stabilize and rebuild Eskom were encapsulated in the Eskom Social Compact signed at Nedlac in December 2020 by government and social partners.
The Federation thus supports the objectives of the Eskom Debt Relief Bill and the relief it will provide to Eskom. We believe that this relief will help Eskom to shift its resources to ramping its maintenance programme, this is the fastest way to ending loadshedding and thus easing the burdens on workers, their families, businesses, the economy and the fiscus.
COSATU welcomes the positive aspects in the Eskom Debt Relief Bill and hopes it will provide the support Eskom needs to ramp up maintenance and end loadshedding. The Federation is however concerned on the debt relief conditions attached, in particular the prohibition on Eskom investing in new generation capacity. Unless is allowed to invest in new modern generation capacity, its long terms sustainability remains at risk.
We agree with the Bill’s position in highlighting the need to tackle rising levels of municipal debt, however government needs to development a comprehensive plan to tackle this fiscal threat to Eskom’s sustainability. Treasury needs to work with Eskom to deal with its fiscal leakages and develop an accurate cost reflective regime that does not budget for corruption and wasteful expenditure and expect the public to subsidise this. The law enforcement organs need to play their role in supporting Eskom to tackle the criminality and corruption crippling it.
Issued by Matthews Parks, Parliamentary Coordinator, 26 April 2023
