Cosatu is correct about PIC funds and Eskom

Cosatu is correct about PIC funds and Eskom

A general view of Medupi Power Station on January 1, 2015. The station, previously called Project Alpha and Charlie, is a new dry-cooled coal fired power station being built by Eskom. When completed it will be the largest dry-cooled fired power station in the world. (Photo by Gallo Images / Mail & Guardian / Madelene Cronjé)

If Cosatu’s estimation of the destabilising potential of Eskom is correct, does this not make the social-compacting that the federation is proposing more urgent?

The Congress of South African Trade Unions’ (Cosatu) proposal to deploy R250 billion of Public Investment Corporation (PIC) managed funds to reduce electricity utility Eskom’s debt has set the cat among the pigeons. Criticism of the proposal ranges from the likelihood of the cash injection serving as a disincentive for Eskom reform, exacerbating the state’s financial liabilities since government employee pensions are a defined benefit scheme, with the state bearing responsibility for pay outs in the event of the Government Employees Pension Fund’s failure to meet its obligations. Yet another criticism is the danger of moral hazard – simply put,...




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