Zuma's silence on Eskom privatisation worrying - Cosatu

Feb 12 2016 14:24
Matthew le Cordeur

Cape Town – Trade federation Cosatu said it was “very worrying” that President Jacob Zuma was “silent on Treasury’s crude plans to privatise Eskom” during his State of the Nation address.

Cosatu was referring to reports that Finance Minister Pravin Gordhan “argued for the sale of a stake in Eskom at a meeting of senior ruling party leaders and government officials” in January, which Bloomberg reported this month.

Eskom CEO Brian Molefe told Bloomberg that there are people who felt to alleviate the financial pressures, a portion of Eskom needs to be sold to the private sector. “I don’t think it would be a good idea at this point in time,” he said. “I don’t think we’d get a good price.”

READ: Gordhan vs Molefe in potential sale of Eskom stake

Cosatu echoed this sentiment in its statement on Friday, saying that Eskom is a strategic developmental state-owned enterprise (SOE) that was built by workers to provide affordable electricity for all.  

“Privatising it will simply make electricity unaffordable,” explained Cosatu spokesperson Sizwe Pamla.

“We also expect our government to also intervene to stop Eskom squeezing the already struggling lower and middle income families with their continuous above inflation price increases,” he said, referring to Eskom’s latest electricity tariff increase bid.  

Cosatu said Zuma’s efforts to engage business on the steps to address the economic crisis must include labour. “We have seen this omission of labour in Eskom’s War Room,” said Pamla. “Government cannot continue to blame labour for instability in industrial relations if we are not properly consulted.”

Government too soft on SOEs

Pamla said government has been too soft “for far too long on our SOEs”.  

“Their CEOs have been allowed to loot, privatise and outsource at will,” he said. “Telkom, the Post Office and SAA’s workers have borne the brunt of labour broking.”

“Cosatu insist that these SOEs need to be funded adequately to fulfil their developmental mandates and workers cannot simply be squeezed all the time to make up for management’s failures,” he said.

Zuma said on Thursday that he had “heard the concerns raised about the performance of state owned enterprises and companies”.

Zuma said SOEs must be financially sound, properly governed and managed. “We will ensure the implementation of the recommendations of the Presidential Review Commission on SOEs, which outlines how the institutions should be managed,” he said.

“We have to streamline and sharpen the mandates of the companies and ensure that where there are overlaps in the mandates, there is immediate rationalisation.”

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