A number of trade unions have strongly condemned the R5 billion bailout issued to Eskom by PIC (Public Investment Corporation) and the Government Employees Pension Fund (GEPF).
The R5 billion was granted despite the fact that Finance Minister Malusi Gigaba in September 2017 denied that PIC would have to extend its loan to Eskom.
South African Federation of Trade Unions (SAFTU) says the decision by PIC was unwise considering the financial status of the power utility but Eskom says the R5 billion is necessary to cover its operational costs for the month.
Public Servant's Association of South Africa (PSA) has said in a statement that it feels both “disgusted and betrayed” by PIC and GEBF's decision.
The union said: “The PSA is shocked by the decision of PIC board and feel betrayed after all parties agreed in principle that no state-owned enterprise would be bailed out until we are all satisfied that governance has improved at these institutions. We oppose this bailout irrespective of how it is termed."
PSA has also stated that it would be consulting with attorneys to have the entire PIC board declared “illegally constituted”.
Cosatu, on the other hand, said it “grudgingly support[s]” PIC’s decision to grant the loan despite “reservations and trepidation”.
“[W]e view it as a way of ensuring that Eskom and the new leadership are given the necessary support to keep the lights on and restore the power utility to its rightful place,” they said in a statement.
This comes a few months after the trade union cautioned Eskom not to dip into the government pension fund in order to save the struggling enterprise.
Despite the widespread condemnation, both GEPF and PIC say they are confident in their decision to grant the loan following the appointment of the new Eskom board with Jabu Mabuza as chairman and Phakamani Hadebe as new acting group CEO.
The new board was appointed to root out corruption and stabilise management.