"The DA is consulting our lawyers on our legal options to stop the ANC government from using pension funds to bail out Eskom. The DA will do everything in our power to stop this from happening - even if we have to go to the highest court in the land," DA chief whip Natasha Mazzone said.

She described the debt-laden power utility as a "big, black pit" heading for inevitable collapse and said Congress of South African Trade Unions' (Cosatu's) plan to reduce its debt by R254 billion using pension funds was immoral. The plan has the backing of government.

Mazzone quoted President Cyril Ramaphosa telling media on Tuesday that pension funds should not be "too fearful" as his government had a plan to right Eskom after years of rent-seeking scandals. 

According to Cosatu's proposal, a special purpose vehicle would be created that uses pension fund savings to buy out Eskom's debt and refinance it on more attractive terms. 

Cosatu initially proposed that money from the Government Employee Pension Fund (GEPF) be used but Ramaphosa and Finance Minister Tito Mboweni have said private pension funds should also contribute to the debt relief effort.

Mazzone said involving the private sector did not make the proposal any less objectionable.

"It is clear that the ANC doesn't only want to use pension funds of government employees to bail out Eskom, they now also want to go after the pension funds of private-sector workers. In either case, the ANC’s plans are immoral and irrational," she said. 

Why should hard-working South Africans lose a lifetime worth of savings to save a sinking ship? The DA cannot in good conscience sit back and watch as the ANC places the whims and wills of factions and trade unions ahead of the interests and futures of ordinary South Africans."

Ramaphosa said labour, the government and business were close to reaching an accord on how pension funds would be applied to shore up the company. 

Cosatu on Wednesday in a briefing to Parliament's portfolio committee on public enterprises said its plan was not free of risk, but if Eskom collapsed under its debt burden, the economy would collapse and all pensioners would lose their savings. 

The federation's parliamentary representative, Matthew Parks, stressed that the relief should be accompanied by strict conditions and allow Cosatu, the PIC and other stakeholders a say in how the money is spent.

Parks told ANA it should be released in tranches as Eskom complied with prerequisites spelled out in a turnaround agreement.

African News Agency