Saftu rages against Mboweni’s plan to sell SOEs

General secretary of the South African Federation of Trade Unions (Saftu), Zwelinzima Vavi. Picture by Gallo Images / Alet Pretorius

Efficient Group chief economist Dawie Roodt said privatising Eskom would encourage competition in the sector, which would result in cheaper prices.

As the ANC attempts to win the support of its leftist allies to back Finance Minister Tito Mboweni’s plan to sell some state-owned enterprises (SOEs), the non-aligned South African Federation of Trade Unions (Saftu) vowed to take to the streets to fight the plan.

Yesterday the ANC national executive committee (NEC) agreed to discuss Mboweni’s economic transformation, inclusive growth and competitiveness plan, titled Towards an Economic Strategy for South Africa, further at its upcoming alliance summit.

The Congress of SA Trade Unions (Cosatu) and the SA Communist Party (SACP) initially rejected the initiative but the ANC was hoping to convince the two to compromise.

Yesterday Saftu reiterated it was strongly opposed to the strategic growth plan, which included selling SAA and unbundling Eskom.

Saftu general secretary Zwelinzima Vavi said the federation was planning a general strike against Treasury’s decision to sell SOEs not meeting their mandate.

He added: “This is yet another provocation by Treasury and the minister. Selling SOEs, or part privatisation, would be a direct attack on the working class. He wants a fight and a fight we will give him.’’

Vavi blamed government mismanagement for the dire financial state SOEs were in.

“Now he (Mboweni) and the ANC want to cut the SOEs budgets so they collapse, opening the door for the private sector to benefit.’’

He said high electricity tariffs had led to retrenchments in businesses and privatising Eskom would lead to even higher tariffs that would hit the working class.

But Efficient Group chief economist Dawie Roodt said privatising Eskom would encourage competition in the sector, which would result in cheaper prices.

He said the proposed unbundling and part-privatisation of Eskom had a good chance of benefitting consumers.

“High electricity tariffs from the privatisation of Eskom is the biggest misconception. Competition in the sector will persuade power suppliers to offer electricity at lower prices.”’

He stressed that it was too late to sell some SOEs as many had been destroyed and had little market value, proposing that if government wanted to save taxpayers’ money it should close down some SOEs, like SAA.

On Sunday, Mboweni announced a proposal to sell some SOEs, saying government should stop subsiding SOEs in order to be able to deliver services more effectively.

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