Gigaba on R5bn bailout

THE ructions in the ANC and the supposed “two centres of power” will have absolutely no effect on the budget,Picture: Getty Images

FINANCE Minister Malusi Gigaba is today expected to meet with trade unions and break his silence regarding the controversial R5bn Public Investment Corporation (PIC) grant to Eskom. He is expected to face a barrage of questions on how the grant could have been authorised without his knowledge.

The PIC invests and manages funds on behalf of, among others, the Government Employees Pension Fund (GEPF), with the Minister of Finance as shareholder representative. The Public Servants Association (PSA) which represents 237000 government employees who have their pensions in the hands of the GEPF, says the meeting with Gigaba will be behind closed doors.

“We received the invitation on Friday from Gigaba to discuss the issue. This will be the first time Gigaba has spoken on the matter since news of the deal broke last week. The PSA immediately expressed its disquiet at the deal. “It seems the meeting will be behind closed doors. We don’t have the powers to invite the media as this is handled by the Treasury,” Tahir Maepa, PSA acting deputy general manager, said.

Last week, the GEPF, via the PIC, announced that they agreed to provide Eskom with a loan of R5bn to help cover expenses for February. According to the joint statement, the bridging facility will be entirely backed by unutilised government guarantees at Eskom’s disposal, meaning the full faith and credit of the national government will stand behind the loan.

But this was met with disapproval from public servants unions such the Public Servants Association (PSA), the Democratic Nursing Organisation of South Africa (DENOSA), and the Federation of Unions of South Africa (Fedusa). Now Gigaba will be in a hot seat this morning and unions demand explanations and details how the deal is structured and how the PIC arrived at its decision.

Last week, Gigaba’s spokespersonMaihlome Tshwete said neither the Treasury nor the minister were involved in the decision taken by the PIC. However, in terms of the meeting held last week between the PSA and PIC’s CEO, Dan Matjila, accompanied by other two PIC executives, it is alleged that the organisation promised to give details sometimes this week on when Eskom will be paying back the money. On Friday, the PSA served the GEPF with a letter of demand regarding the R5bn bailout.

PSA general manager Ivan Fredericks said the union was alarmed that the GEPF agreed with the PIC, despite an agreement between the PSA and other unions with the GEPF and the PIC that no GEPF funds would be used to bail out any state-owned company or entity before agreement had been reached that their governance had improved sufficiently. It is no secret that Eskom is cash strapped and is barely a going concern.

Fredericks said on Friday the PSA’s attorneys had issued a letter detailing the union’s demands to the GEPF’s principal executive officer, Abel Sithole. However, the GEPF’s spokesperson, Matau Molapo, told The New Age yesterday they were not aware of the letter.

Attempts to get confirmation from the Treasury about the meeting were unsuccessful, but The New Age has a letter inviting unions to today’s meeting.