South African Union Takes Legal Step to Stop Eskom Pension Plan
South African Union Takes Legal Step to Stop Eskom Pension Plan
South African labor union Solidarity began a legal process to block plans to use the state pension fund to help debt-stricken power utility Eskom Holdings SOC Ltd.
The action adds to opposition from other employee groups resisting a proposal by the Congress of South African Trade Unions, the nation’s biggest labor organization, to cut Eskom’s debt by 254 billion rand ($17.2 billion). Cosatu had expected to reach a pact with business on the idea before President Cyril Ramaphosa presents his state-of-the-nation address on Thursday, but has pushed back that timeline.
Solidarity said it wrote to the Government Employees Pension Fund and the Public Investment Corp., which manages the fund, demanding that they reject the Cosatu plan.
“If Solidarity does not receive such a guarantee, or if a decision is made to implement the controversial Eskom plan, Solidarity will take further legal action, which may include urgent legal assistance,” the labor union said in a statement.
Eskom’s inability to provide sufficient power is hindering growth in Africa’s most-industrialized economy. The loss-making business has 454 billion rand of debt and is relying on government bailouts to make interest payments.
Earlier this week, the Federation of Unions of South Africa, which counts public servants among its more than 515,000 members, rejected the Cosatu plan and called for Eskom to be placed under a local form of bankruptcy protection. Cosatu has about 1.8 million members, while Solidarity has 140,000.
To contact the reporter on this story: Paul Burkhardt in Johannesburg at pburkhardt@bloomberg.net
To contact the editors responsible for this story: James Herron at jherron9@bloomberg.net, Paul Richardson, Alastair Reed
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