Cosatu’s Eskom Plan Doesn’t Diminish State’s Liability, BNP Says

A proposal by South Africa’s biggest labor-union federation to rescue debt-stricken Eskom Holdings SOC Ltd. with government workers’ pensions would amount to little more than a shifting of contingent liabilities, according to BNP Paribas South Africa, Bloomberg News reported. The Congress of South African Trade Unions’ proposal that state institutions including the Public Investment Corp. take over 254 billion rand ($17 billion) of Eskom’s 454-billion rand debt pile is a concern because the government will still bear ultimate responsibility, said Jeffrey Schultz, a senior economist at the lender. “The government employees pension fund is a defined-benefit scheme,” Schultz said. Read more