PIC betrayed workers with R5bn Eskom loan - PSA

Cape Town - The Public Service Association (PSA) has reacted furiously to the Public Investment Corporation’s (PIC) R5bn loan to Eskom calling it an “illegal transaction” which the union feel has “betrayed” workers.

“The PSA in the meantime is consulting with its attorneys to urgently look at declaring the whole PIC board illegally constituted after the due date of the 12 February 2018 given to the PIC to prove its board’s legitimacy,” the union, said in a statement  on Monday afternoon.

The union, which represents around 200 000 civil servants has written to the PIC to complain that none of the unions sit on the PIC’s board, which they claim contradicts the PIC Act.

“If we are able to prove the appointment of the board was illegal… it will be only right that all the decisions they took are [also] null and void,” PSA deputy general manager Tahir Moapa told Fin24 by phone.

The PIC Act of 2004 states: “The Minister [of finance] must, when appointing the board, have due regard to the nominations submitted to him or her by the depositors.”

The PSA said that all parties agreed in principle not to use the R1.9 trillion in the public servants pension fund, to bail out state owned companies (SOCs), until there’s agreement that governance has improved.

“It is now clear, we cannot trust both boards to look after our members’ pension,” the union said

Cosatu supports lifeline

The Congress of South African Trade Unions (Cosatu) differs with the PSA and supports the R5bn lifeline to Eskom, but with conditions.

“We agree to it but with the understanding that no jobs will be touched [at Eskom], Cosatu spokesperson Sizwe Pamla commented to Fin24.

Pamla added that newly appointed Eskom chairperson Jabu Mabzua cut jobs as part of a restructuring process at Telkom, when he took over as chair of the board.

He said that workers’ pensions should be used to ensure SOCs aren’t privatised, in particular the power utility as this would lead to electricity price hikes.

“We have to look at the bigger picture, the interest pf public servants should reconcile with workers broadly”, he said.

Cosatu represents around 800 000 employees in the public sector.

Pamla said they will continue with the process of trying to have worker representation on the board of the PIC itself, instead of just at the Government Employee Pension Fund (GEPF) level.

Both Cosatu and the PSA , in September 2017, objected to reports that the PIC would bail out the flailing South African Airways (SAA) and demanded that the level of union representation on the board, be improved.

The PIC on behalf of the GEPF, advanced the R5bn bridging facility to Eskom for one month. The loan will fund the company’s operations during the month of February 2018. But three other South African banks will also have to help Eskom out, the PIC stated.

Following Eskom request for assistance with its liquidity challenges, the PIC said it conducted its own due diligence and obtained approval in line with its mandate and corporate governance requirements.