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Tuesday, June 22, 2021

Teacher unions blast PIC’s loan to the embattled power utility

Thabo Mohlala

Teacher unions have added their voice to the growing criticism of the Public Investment Corporation (PIC)’s recent investment decisions specifically pertaining to Eskom.

The PIC is the custodian of government’s employees’ pension fund and is also tasked to invest them in markets and entities that would add value to the pension fund.

The South African Teachers’ Union (SAOU) took a swipe at the PIC and the Government Employees Pension Fund (GEPF) for granting a R5bn bridging loan facility to the ailing state power utility. According to the union’s chief executive, Chris Klopper, the loan is not a sound investment and is also not in the best interest of the fund.

In a statement released earlier today, Klopper said they find no proof that suggests this loan facility is in keeping with prudence investment and that this is made worse by the fact that the State will provide a guarantee.

“We all know that State funds are depleted and should Eskom default on the loan the State will not be able to honour its commitment,” Klopper said.

The State has recently underwritten loans to specifically prop up operations of some of its parastatals, notably South African Airways, plagued by poor governance problems. We believe this particular loan, said Klopper, does not in any way comply with prudence and investment in the best interest of the Fund and they are convinced that the PIC should step away from it.

“We think that it is time for transparency and that the GEPF Trustees should state the criteria on which they based their decision to approve the loan. The Fund members have the right to know in what way the action serves the best interests of the Fund,” said Klopper.

National Teachers’ Union (Natu)’s Alan Thompson also expressed his organisation’s displeasure at the PIC’s loan transaction to the power juggernaut. “We are not happy at all. We believe the PIC has recently invested workers’ money in an erroneous manner. Look at the issue of Steinhoff, workers’ money disappeared because of the way the PIC poorly handled the workers’ investment money,” said Thompson.

What we want, he continued, is a full-scale investigation into what really happened in the Steinhof saga. “We also feel strongly that the PIC should use the workers’ pension money in such a way that they [government’s employees] benefit the most from the fund. One way of doing this is to create a facility that enables workers to draw on some portion of their pension money to buy essentials such as houses or pay for their kids’ education.

“It must be a customised facility that makes it possible for workers to repay the loan at a reasonable interest rate. If the workers don’t pay it back, obviously it will be a loss but a better loss because it is their money after all,” said Thompson.

The role of the PIC came under scrutiny since rumours started to swirl that the Gupta-family was eying to capture it because of the trillions it administers. Last year before he became the ANC president, Cyril Ramaphosa cautioned delegates at the South African Democratic Teachers’ Union (Sadtu)’s National General Council to guard against their money being used for “nefarious purposes”.

Attempts to speak to Sadtu and the National Professional Teachers’ Organisation (Naptosa) failed at the time of publication.

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