Trade union Solidarity has threatened legal action against a proposed plan to use the pensions of government employees to cut Eskom’s R450-billion debt burden, saying it would be in breach of the Public Investment Corporation’s (PIC) mandate and must be stopped.
The union says it has started a legal process but has not yet filed any court documents.
This comes after the Congress of South African Trade Unions (Cosatu) proposed a plan to create a “special purpose finance vehicle” involving what it called a social compact between government, the PIC, the Development Bank of Southern Africa and the Industrial Development Corporation to cut Eskom’s debt by some R250bn. This proposal by Cosatu, which also included 26 other points to turnaround the struggling power utility, served as a basis for talks between the government, business and unions.
On Wednesday, Solidarity said it had written to the trustees of the Government Employees Pension Fund (GEPF) and the PIC to voice its concern. The PIC invests on behalf of the GEPF and some other funds. It manages over R2 trillion in assets. Earlier in the week, the GEPF said it had not been consulted about the plan. The PIC did not return a Fin24 request for comment on Tuesday.
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