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MPs grill Treasury over Eskom China loan 'secrets'

Oct 16 2018 20:02
Khulekani Magubane, Fin24

Minister of Finance Tito Mboweni might have had his deputy Mondli Gungubele and director general Dondo Mogajane to field tough questions from Parliament’s Standing Committee on Finance, but that did not stop the committee from demanding more transparency from him regarding the books of state-owned entities.

Government announced that Eskom secured a $2.5bn (over R33bn) loan during the recent BRICS summit in Johannesburg from the China Development Bank (CDB).

Committee chair Yunus Carrim asked about the loan from the bank, why its terms and conditions were still being kept private and whether this was consistent with South African law and public finance management guidelines.

“We haven’t discussed the China loan. Can you give us a reason consistent with our laws and regulations why the terms of this loan are allowed to be kept secret? It could very well be above board, but it needs to be explained,” said Carrim.

Committee member for the Democratic Alliance Alf Lees asked National Treasury what approach it would take towards state-owned enterprises which over-extended their access to debt markets to fund their operations at the expense of the fiscus.

Lees also asked if Eskom would be monitored closely as it continues pushing borrowings up through a R600bn debt plan and how Treasury hoped to enforce transparency if the utility’s loan from the CDB were being kept under wraps.

Mboweni told the committee that while he understood the concerns of the committee, the relationship between China and South Africa was sensitive and critical to the country’s many ambitions, but complicating the situation.

“I understand the concerns that the committee has regarding the loan, in light of what is happening with another African state which has gotten into an arrangement with China. However, China are our friends. It is very difficult to set rules when it comes to friends and money, but I am sure that the transaction will be handled very responsibly,” said Mboweni.

Mogajane told the committee that the Department of Public Enterprises had its own insights into the finances of Eskom and other entities. He acknowledged that it is only right that South Africans know the terms of the loan from China.

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