COSATU Presentation Standing Committee: AppropriationsSpecial Appropriation Bill11 September 2019
Eskom • Financial crisis facing Eskom; • Impact of potential collapse of Eskom on: • 45 000 employees; • PIC’s R90 billion invested in Eskom; • R450 billion debt exposure to state & other SOE debts; • Risk to a fragile economy recently emerged from recession; and • Risk to millions of workers’ jobs.
Special Appropriation Bill • COSATU and NUM wholehearted support for Bill; • Welcome intervention by state to save Eskom and protect workers and the economy; • Need for Parliament to urgently pass Bill.
COSATU Conditions for Support for Bill • Clear turnaround plan to stabilise & save Eskom that must include the following key principles and components: COSATU Non-Negotiable Demands: • No worker must be retrenched by Eskom. • Eskom must remain a State Owned Enterprise and not privatised.
Turnaround Plan: Internal Finances • Comprehensive forensic audit of ALL Eskom expenditure and contracts. • Diagnosis of where Eskom is losing money. • List of what was looted from Eskom & by who? • Plan with NPA, Hawks, SAPS & SSA to recover stolen funds & arrest & prosecute guilty parties. • Honour President & ANC’s commitment that Eskom will not be privatised. • Includes rejecting Treasury’s proposals to do so.
Turnaround Plan: Personnel • Urgent appointment of a competent & experienced CEO. • Reduction in bloated senior management structure. • Freeze & reduction in excessive packages paid to senior management.
Turnaround Plan: Personnel • The appointment of worker representatives to the Eskom Board. • Honouring President & ANC’s commitment that no worker will be retrenched. • Where there is a need to reskill & redeploy workers from one section of Eskom to another or even municipal electricity departments that that be engaged upon with unions through the established collective bargaining structures.
Turnaround Plan: External Finances • Plan to deal with Soweto non-payments. • Plan to ensure all municipal arrears are paid. • Plan to ensure all government arrears are paid. • All Eskom and electricity payments by all consumers be paid into one national account. • Municipal add on tariffs be reviewed to determine their actual value and legitimacy. • Any legitimate municipal charges then be transferred to the municipalities from the national account.
Turnaround Plan: External Finances • Charge wealthy & excessive consumers higher tariff levels based upon property value, company profit margins & excessive consumption to make tariffs progressive & reduce wasteful consumption. • E.g. similar to water tariff regime implemented during the drought in the Western Cape. • Increase allocation of free electricity to 3.6 million indigent households to cushion poor from ever rising tariff levels.
Turnaround Plan: Economic Path Forward • Eskom’s license be expanded to allow it to produce and own its own renewable energy plants. • Eskom’s Independent Power Producer contracts’ be amended so that either their tariff rates be reduced to make them affordable or if not, then be cancelled. • The extending of life spans for feasible power stations.
Turnaround Plan: Economic Path Forward • Eskom’s tariff hikes be inflation linked to ensure affordability. • Eskom’s tariff structure be reviewed to ensure affordability for domestic & neighbouring state’s households & industries. • If tariffs are affordable, demand for Eskom’s supplies to SADC can be increased. This will drive regional industrialisation & create economic opportunities for South Africa. • Special plan needed for fragile mining industry heavily hit by Eskom’s rampant increases.
Turnaround Plan: Economic Path Forward • A plan be developed with DTI, Dept. of Transport & auto-manufacturing industry to build a local electric vehicle capacity. • This should be geared to existing local, African , European & North American as well as future export opportunities in South America, Asia & Australasia. • This must include cars, motor bikes, busses & trains. • Work with DTI to rebuild local solar panel industry to supply both domestic & export markets eg protect local producers from imports.
Turnaround Plan: Just Transition • Plan to reskill & redeploy workers employed at aging power stations & mines reaching end of life span. • E.g. building solar panel factories in same towns with aging power stations & mines so their workers can be transitioned to new jobs. • Water conservation, recycling & harvesting plan. • This can include ensuring all buildings have such infrastructure, clearing alien vegetation, planting water wise indigenous vegetation, investing in water recycling infrastructure etc.
Turnaround Plan: Just Transition • Land rehabilitation plan. • Eg programmes to reforest land, combat desertification, rehabilitate agricultural land, rehabilitate urban land, building green cities etc. • Scientific tools & methods to transition industries to become green & sustainable. • Prioritising agriculture, transport, construction, education, energy, clothing, paper, plastics, glass etc. • Provide support to build consumer & industrial goods recycling sectors for all products.
Conclusion • Urgency of now; • Avoid IMF route; • No retrenchments; • No privatisation; • Clear turnaround plan • High level engagements at Nedlac; & • Find a collective South African solution including a social compact where all parties contribute.