The Congress of South African Trade Unions has noted with deep concern the report by Eskom Chairperson and Acting CEO Jabu Mabuza that Eskom is expected to lose another R20 billion next year. This issue calls for urgent intervention, especially because in the same report Eskom failed to account for an entire R1,5 billion.

COSATU demands the immediate removal of the senior managers and the entire board of Eskom because they have failed to fix the power utility after two years at the helm and they are only worsening the situation. This latest report comes after the power utility experienced about R21 billion after tax-losses in the last financial year. Workers have been funding the power utility with exorbitant bailouts and tariffs for too long and this is not sustainable.

We respect the board members and senior Eskom Managers enough to believe that this is all they can do.The Federation is now convinced that this mismanagement of the power utility forms part of an underhanded ploy that is being cooked to force its unbundling and privatisation. Many in government and in the private sector are no longer interested in honestly saving the SOE’s and their bottomless contempt for State-Owned Entities is obvious for everyone to see.

Social partners have been very flexible and constructive in trying to assist the new Eskom management to fix the power utility and these shocking results are unacceptable. The illegitimate appointment of Jabu Mabuza as both a CEO and a Board Chairperson represents everything that is wrong with the government’s efforts to fix the power utility.

We expect the government to be lawfully audacious in doing its work of trying to fix our economy and not to indulge in these self-serving shortcuts that create an unaccountable cabal.The underwhelming performance of both the Eskom Board and Senior Management represents a gross betrayal of the people of South Africa

COSATU supports and welcomes the additional R59 billion in funding provided for by the government to Eskom.  The federation agrees with many of the conditions imposed by the government upon Eskom in exchange for this funding.  However, we do not believe that the current management team at Eskom has the capacity to achieve these conditions e.g. ensuring that outstanding debts are collected from defaulting departments, municipalities and communities. The Federation supports prescribed assets in principle.  However, our support for the PIC’s continued investment in Eskom and prescribed assets through government bonds is not a blank cheque for government to hide its incompetence and also using it to fix the mistakes of the criminally negligent management.

The federation demands that there be a public forensic audit of all Eskom expenses.  This must include all coal contracts where it is clear that systematic profiteering is taking place.All those who have looted must be arrested by SAPS, prosecuted by the NPA and given life sentences in our prisons.  Their stolen assets must be returned to the state.  If the leadership of our law enforcement agencies does not have a plan to fix  the greatest crime facing the nation today, then the President must remove them too and appoint persons with the courage to do so.

Eskom’s license must be amended by Nersa to allow it to have its own renewable energy generation.  The existing unaffordable IPP contracts must be amended to reflect real costs of generation or simply be scrapped.  The state cannot subsidise profiteers.

The government must intervene with Eskom and Nersa to make electricity tariffs once again affordable for domestic consumers and industry as well as neighbouring states.  Special attention must be given to fragile economic sectors and the poor e.g. by increasing free electricity allocations to indigent households.
Government and the auto-manufacturing sector must develop and roll out a rapid plan to build electric vehicles locally.  These should be geared for both the domestic and export markets.  These must include motorcycles, cars, buses and trains.

The government needs to come with a serious plan to halt the rapid collapse of PRASA.  The shocking revelation at Parliament yesterday by the Auditor General that PRASA’s financial statements are so pathetic that they cannot be audited must wake government up from its deep slumber on this crisis.  The collapse of PRASA’s audits is not an accident.  It is linked to the industrial-scale looting that has become the hallmark of PRASA.
Whilst COSATU is willing to engage with government on the PIC’s continued investment in Eskom and prescribed assets, one thing must be clear to government and Eskom, the power utility cannot be allowed to retrench a single worker.  There is no way that workers can invest their retirements wages in Eskom and then be told that other workers will be retrenched.  Any attempt by Eskom to retrench will be met with a massive strike because workers are not responsible for the looting and mismanagement in the state and the private sector. 

The government must move away from offering workers platitudes but begin to plan to ensure that affected workers are reskilled and redeployed and that fragile jobs and sectors are protected and assisted. The country needs to ensure that new green jobs and sectors are created, and also ensure that no worker or community is abandoned by a heartless private sector and a bumbling state.

Issued by COSATU

Sizwe Pamla (Cosatu National Spokesperson)

Tel: 011 339 4911
Fax: 011 339 5080
Cell: 060 975 6794