# Gordhan: Taking worker pensions to bail out Eskom will be ‘great move’

- Link: https://dearsouthafrica.co.za/2020/02/05/gordhan-taking-worker-pensions-to-bail-out-eskom-will-be-great-move/
- Published: 2020-02-05T12:22:16+02:00
- Author: dearSA

![](https://cdn.dearsouthafrica.co.za/wp-content/uploads/2020/02/20191155/Screenshot-
83.png "Screenshot (83)")

## The public enterprises minister is looking to save the 16,000 jobs dependent on the power utility.

Minister of Public Enterprises Pravin Gordhan has given a clear indication that 
labour federation Cosatu’s proposal to use money managed by the Public Investment
Corporation (PIC) to support Eskom is being taken seriously.

Speaking at a lunch hosted by law firm ENSafrica in Cape Town on Tuesday, he commended
the trade union federation for the proposal.

“Trade union federation Cosatu has come up with its own innovation to protect jobs
within the Eskom environment,” Gordhan said. “That is 16,000 people.”

Although not explicitly stated, the problem is that retrenching people from the 
power utility would be extremely difficult politically. The minister therefore appears
prepared to consider the Cosatu proposal, which suggests that the PIC together with
the Industrial Development Corporation and the Development Bank of South Africa 
should take over Eskom’s debt.

> “Cosatu is saying: use the workers’ pension money to mitigate the debt burden 
> that Eskom has,” said Gordhan.

“That is a great move on the part of labour to say we are part of the solution, 
not just antagonists to any change that is happening,” he added.

“Over the next month or two we are going to see fascinating exchanges, helping to
get all the resources available in the country to save an important institution 
like Eskom and get it back to the levels of effectiveness and efficiency required.”

**The rotters**

Gordhan began his comments about the power utility by emphasising the extent to 
which Eskom has been hollowed out by state capture, and the size of the challenge
faced in managing its recovery.

“Eskom was one of the institutions what was severely damaged by corruption,” he 
said. “From the outside, one often hears the narrative: replace the board and CEO,
put in a few new managers and you’ll get it right.

> “However, simply replacing the leadership at the utility is not enough. Expertise,
> processes and experience all need to be restored.

“What we’ve learnt in the last 18 months is the systemic effect of corruption is
huge,” said Gordhan.

“In the case of Eskom, it breaks down the engineering disciplines – what the engineers
call their engineering rhythms – and it gets the operations to decline to a point
where basic disciplines are not followed any longer and need to be reintroduced.

“And in the process of corruption, the good people either leave or the good people
are marginalised, and the rotters rise to the top.”

**Prepare for long-term load shedding**

Gordhan also indicated that part of the plan for turning Eskom around would likely
involve ongoing load shedding.

“We need a clearer idea – and it’s being discussed quite intently – of what kind
of rigorous maintenance plan we can put in place that is both sustainable and lasting,”
the minister said.

> “What we’ve had in the recent past is lots of money spent, but a decline in Eskom’s
> effective output.

“So who is making money out of all this maintenance work, and what kind of quality
of maintenance are we actually getting?”

Part of the solution, Gordhan suggested, would be long-term load shedding to take
pressure off the system.

“We are likely to go through a period when we are going to have load shedding,” 
he said. “But we want to be in a position where the calculations that we are making
at an Eskom level are as accurate as possible, not speculative, and substantiated
with proper data and statistics.

“When that is ready, a proper and formal announcement will be made so that businesses
can prepare appropriately.”

**The split is coming**

The minister added that the process of splitting Eskom into three separate entities–
generation, transmission and distribution – is underway.

“The decision has already been made and the process has already started,” he said.“
The transmission entity will be a self-standing entity in one form or another within
the next month or so.

“That is the beginning of the structural change that we need to undertake as far
as Eskom is concerned.”

_Brought to you by [Moneyweb](https://www.moneyweb.co.za/news/gordhan-signals-pension-pot-offer-for-eskom-will-be-considered/)_