South Africa\u2019s biggest labour group is proposing that more than half the debt of state-owned Eskom Holding SOC Ltd. be put into a special purpose vehicle to help save the utility and avoid job cuts.<\/p>\n
The Congress of South African Trade Unions urged the government strike a deal with the Public Investment Corp., Africa\u2019s biggest money manager, to help cut Eskom\u2019s debt to R200 billion ($14 billion) from R450 billion, according to a document dated Nov. 10-11 and seen by Bloomberg News.<\/p>\n
Development finance institutions should also be involved, the group said.<\/p>\n
The debt restructuring would help diffuse a crisis that \u201cthreatens not only to implode the state but also the economy,\u201d Cosatu said. \u201cNot only are the jobs of workers at Eskom at risk, but in fact all workers in the event of Eskom collapsing.\u201d<\/p>\n
South Africa is under intense pressure to come up with a workable turnaround plan for Eskom, which is struggling to service debt and was forced into a fresh round of managed power cuts this month. Yet passing debt to the PIC would come with its own risks, as the company is the main manager of government-worker pension funds.<\/p>\n
Cosatu and other union federations, government departments and the National Treasury have been in talks with Eskom\u2019s creditors, said Matthew Parks, Cosatu\u2019s parliamentary co-ordinator. The group\u2019s meeting with them \u201cwent very well\u201d and are ongoing, he said.<\/p>\n
Eskom\u2019s turnaround plan must also include public and private investments \u201cto produce renewable-energy technology locally,\u201d especially in Mpumalanga, Limpopo and Eastern Cape provinces where the coal is mined and used in power stations, Cosatu\u2019s proposal said. Many of the utility\u2019s coal stations are close to being decommissioned.<\/p>\n
Those responsible for mismanaging Eskom should be fired and anyone found to have stolen funds from the utility be arrested, Cosatu said. The company should assess the workforce and reskill employees where necessary, the group added, provided no staff lose their jobs.<\/p>\n