THE NUM and the government are headed for a showdown over the proposed sale of Eskom’s mortgage ginance unit.
The Eskom Finance Company (EFC) which specialises in mortgage lending to employees has reportedly been put up for sale. It has emerged last week that the national Treasury begun a pre-qualification process for bids, marking a first step in efforts by the power utility to sell asset’s and stabilise its financial situation.
Eskom Finance has an R8.7bn loan book and about 16000 customers, bid documents posted on a government website last week showed. Some observers view this as part of the government’s plan to privatise nonperforming SOEs. But the government and Eskom brushed off the talk of privatisation as mere speculation by those bent on raising red herrings.
The Cosatu affiliated NUM vowed that it would challenge the move and insisted this would place the jobs of thousands of workers in jeopardy. The union said massive job losses would result should the power utility go ahead with the sale of its finance unit as planned.
“We are against the sale of Eskom’s finance company at all cost. “Although the EFC has only been benefiting Eskom’s senior executive directors, the union has been pushing hard for all ordinary Eskom workers to benefit from the housing subsidy scheme,” NUM spokesperson Parish Mashego said yesterday.
NUM vowed that it would not let the issue go unchallenged. It said it would use all avenues available to halt the proposal. Mashego insisted that NUM had always demanded that the scheme should benefit all workers “and now the government want to put it on sale. This is unfair.
“It is unfair because if the government goes ahead with its mission, that means about 500 employees working in that unit are likely to lose their jobs. “Eskom and the are government supposed to consult with the union in terms of the Labour Relations Act. Eskom cannot just make decisions without consulting workers,” he said. However, industry experts have welcomed the move to put EFC on sale saying that the unit was a drain on the power utility’s cash flow.
Eskom narrowly avoided a liquidity crunch this year by securing R20bn in short-term funding from banks but still faces an uncertain future. In an interview with The New Age last week, energy expert Chris Yelland said the main reason behind the sale of EFC is for Eskom to raise money, nothing else. “The power utility is doing this to raise money taking into consideration that its main shareholder, the government, doesn’t have the cash to bail it out.
“Eskom need cash badly and the only way to survive is to sell non-performing assets and scaling down the 47000 staff headcount,” he said.