A pact between South Africa\u2019s government, labor unions and business to cut the debt of the stricken national power utility won\u2019t include a pledge to use the pensions of state workers as had been initially proposed.<\/p>\n
An agreement due to be signed at the next meeting of the President\u2019s Working Council has no firm undertaking to use the funds of the R2.1 trillion ($120 billion) Public Investment Corp, which manages state workers\u2019 retirement money, or private pensions, said Cas Coovadia, the chief executive officer of lobby group Business Unity South Africa.<\/p>\n
Coovadia spoke in an online briefing with Bloomberg.<\/p>\n
The Congress of South African Trade Unions proposed in December that funds from the PIC and the Development Bank of Southern Africa, a state lender, be used to cut Eskom Holdings SOC Ltd\u2019s debt to about 200 billion rand.<\/p>\n
The utility currently has a debt burden of about R480 billion.<\/p>\n
\u201cWe just said all possible public and private financial support for Eskom and to reduce its debt must be mobilized,\u201d said Matthew Parks, parliamentary coordinator of Cosatu, which is a member of the country\u2019s ruling coalition. \u201cWe kept it high level.\u201d<\/p>\n
A date for the meeting where the accord will be signed hasn\u2019t been set. It was due to take place on Aug. 3 but was delayed.<\/p>\n
Cosatu\u2019s initial proposal raised concerns that pension funds could be forced to invest in Eskom through the use of so-called prescribed assets.<\/p>\n
Business leaders, including Coovadia, have said while private investors are willing to invest in state companies and infrastructure, they don\u2019t want to be compelled or directed to, and must earn an acceptable return on investment.<\/p>\n