5 February 2016

South Africa: Cosatu Will Fiercely Oppose Any Talk of the Privatisation of Eskom

press release

The Congress of South African Trade Unions has noted with shock the media reports that there is talk of a possible sale of a 49% stake of Eskom by the National Treasury to private investors. If this is true, the federation will vigorously oppose such an ill thought and inappropriate policy proposal from the Treasury.

This decision will also herald a new era in government's abandonment of the ANC and Alliance policies. The May 2008 Alliance Summit called for a moratorium on privatisation and outsourcing and the review of current outsourced public sector utilities.

The ANC made a commitment to ensure that state-owned commercial entities operate as powerful instruments of economic transformation and remain firmly within the control of the state, in order to increase their capacity to respond effectively and efficiently to its developmental agenda.

As a country ,we need a strong developmental state committed and ready to address unemployment, inequalities, and that is prepared to transform the State Owned Entities like Eskom in line with the developmental agenda of the ANC government.

COSATU reiterates its position that the task of fundamental transformation of our economy, the creation of decent work and the provision of basic services to the majority of our people cannot be left to the market forces. Government cannot afford to outsource its developmental role to the private sector. The private sector is not driven by any need to serve the poor but by their desire for profit maximisation.

We have heard from Eskom that their challenges are as a result of their failure over a period of time, to maintain their plants. This manufactured crisis was deliberately engineered so that, it could be used as an excuse to privatise the parastatal. We will vigorously opposed this privatisation as a solution because the poor cannot afford it.

COSATU represents millions of underpaid ordinary workers, who can barely afford the increases in the prices of basic services. Most of our members were excluded from these services by the evil system of apartheid. The 50kWh monthly free basic electricity that government has been providing to poor households is very important but it is still not enough to cushion the poor.

By privatising Eskom ,government will literally abandon the poor and leave them at the mercy of the market forces. They will be plunged into the darkness and many will lose their much needed electricity subsidies that allow them to cope and participate in the economy.

Privatisation of Eskom will not help to meet the social needs considering the mass poverty aggravated by massive job losses that are currently taking place. South Africa has inherited a particularly unequal distribution of income and therefore the state has a responsibility to enhance social protection and provide basic services to South Africans. Privatisation undermines the ability of the developmental state to fulfil its core functions.

Government made a commitment to address the imbalances of the past by ensuring broader and meaningful participation in the economy by black people to achieve sustainable development and prosperity. In a democratic South Africa, state ownership is therefore critical for black people to participate in the economy. Only the state has the capacity to extend basic services and to poor black communities.

COSATU therefore submits that there are alternatives to addressing the funding challenges facing Eskom without privatising and we will oppose any such talk or proposal if it is presented. Eskom was built on the sweat, hard work, tariffs and taxes of ordinary workers, it cannot now be handed over, on a silver platter ,to big business to profiteer at the expense of workers.

The solution to Eskom is to clean up its wasteful expenditure, proper funding from the state, renewable energy, cancel the nuclear madness, affordable tariffs for lower and middle income families and higher tariffs for the high energy users, who consume the bulk of our electricity.

Issued by COSATU

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