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Eskom one step closer to R59bn bailout

Oct 22 2019 18:17
Khulekani Magubane, Fin24

The National Assembly on Tuesday afternoon passed the Special Appropriations Bill aimed at giving financial assistance to Eskom, bringing the beleaguered power utility one step closer to a much-needed tranche of R59bn.

While the Democratic Alliance, the Economic Freedom Fighters, the African Christian Democratic Party, the United Democratic Movement and Freedom Front Plus objected to its passing, 200 votes in favour, 105 against and no abstentions were enough to get the controversial bill through.

The bill will now be referred to the National Council of Provinces.

'You can't have everything'

During a debate on the bill, many argued that Eskom had burnt through a great deal of goodwill in the past and that the spending of funds allocated would have to be monitored.

At the end of the debate, Finance Minister Tito Mboweni took a hard line, arguing that Eskom would need to shape up amid numerous needs competing for government's attention and funding.

"Within the context of declining tax revenues, due to low economic growth, when members say Eskom must be funded, I agree, but where must the money come from? We have to consider that. You can’t have everything every time," said Mboweni.

Mboweni said with various problems dogging Eskom - financial and otherwise - the executive and legislature would need to insist on accountability and competence.

"One of the key issues we need to solve is appointing the correct people to run Eskom.

"We must appoint the correct board of directors, a competent management team, and we must be able to hold them accountable for Eskom," Mboweni said.

No more blank cheques

African National Congress MP and former deputy minister of finance Sfiso Buthelezi told the National Assembly that Eskom must not be allowed to default on its debt, as this would lead to cross defaults.

Democratic Alliance MP Ashor Sarupen said the bill, in its present form, was a blank cheque for more of the same at Eskom and would diminish of oversight and accountability for public money. "It allows Eskom to continue to hold a gun to the heads of our citizens, our businesses and our government," Sarupen said.

Economic Freedom Fighters MP Floyd Shivambu said problems at Eskom ranged from financial constraints all the way to leadership and a restricted capacity to negotiate with suppliers and other businesses in the energy sector, particularly renewables. He was particularly critical of the appointment of board chair Jabu Mabuza as acting CEO, adding: "The bigger crisis Eskom is facing is the stabilisation of coal prices. Established coal suppliers are supplying to Eskom at a higher than market relevant price per ton."

Doomed if you do, doomed if you don't 

Inkatha Freedom Party MP Mfakazeleni Buthelezi told the National Assembly that the party opted to support the special appropriation bill as the country would be "doomed if it did and doomed if it didn't."

Freedom Front Plus MP Wouter Wessels blamed the ruling party and said cadre deployment was behind looting and neglect at Eskom.

ACDP MP Steve Swart said: "A special ad hoc committee must be established to oversee Eskom to ensure that the conditions of this bailout are complied with."

UDM MP Nqabayomzi Kwankwa said governance weaknesses at Eskom had not been addressed and that there was no clear turnaround strategy for Eskom. He called for a concept document to define unbundling and allay fears of privatisation.

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