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MPs slam Eskom appropriation bill as just another lifeline for failing entity

Jul 23 2019 16:49
Lameez Omarjee, Fin24

Some Members of Parliament have slammed the 2019 Appropriation Bill for being nothing more than a "bail out" for debt-ridden power utility, Eskom.

The Standing Committee on Appropriations (SCOA) on Tuesday tabled the bill before the National Assembly for consideration. The National Assembly engaged on the bill, which will now be referred to the National Council of Provinces (NCOP) for consideration.

While chair of the committee Sfiso Buthelezi commended the bill which allows for the majority of allocations to be made to health, education and social welfare priorities, MPs of opposition parties have argued that there have been no real amendments to the bill, which has simply been rubber stamped allowing budget cuts in other expenditure priorities in favour of saving Eskom.

Earlier Finance Minister Tito Mboweni tabled a special appropriations bill for Eskom, allowing it to be allocated R59bn from the national revenue fund over the next two years to help it meet its financial obligations.

The SCOA had agreed to the finance minister invoking section 16 of the Public Finance Management Act in April this year authorising R17.652 emergency funding to Eskom. Buthelezi said the SCOA backs the decision. "Failure to do so would have had untold consequences to the destruction of Eskom and other SOCs (state-owned companies) due to cross defaults," he said.

During the debate on the bill, EFF MP Mmabatho Mokause criticised the committee for not enacting major changes MPs had agreed to in various engagements on the bill, adding that the bill is the same as under the Zuma-era. "We agreed on much bigger changes, but it ends up being an ANC talk shop," she said.

Mokause further pointed out that efforts to stabilise Eskom in the past have "failed dismally" and accused government of trying to collapse Eskom and make it dysfunctional in order to sell it off cheaply to the private sector. "Whatever money is put in Eskom is being looted," Mokause said.

Elphas Buthelezi of Inkatha Freedom Party, expressed his party's disappointment in the emergency  R17.652bn authorised for Eskom. "It is unacceptable to throw fin resources to non-financial problems," he said. "Eskom is like a car leaking fuel, we keep pouring more fuel instead of fixing what is broken," he added.

Buthelezi argued that there has been no recourse against those who have mismanaged public funds in departments and municipalities. "There is little to no action for taking money from state coffers," he said. Buthelezi said measures should be put in place to make fruitless and wasteful expenditure something of the past.

Wouter Wessels of Freedom Front Plus argued that Eskom is in need of financial assistance because of poor decisions made by the ANC-led government in its appointment of Eskom leadership. "The mess we are facing is not caused by a natural disaster, but one caused by the ANC," he said.

DA MP Geordin Hill-Lewis suggested the bill's provisions included cuts which negatively impacted the poor in order to bail out Eskom. "This is not the work of an active Parliament, this is the work of a rubber stamp. Today we are being asked to pass a bailout budget that includes deep-deep cuts to basic service to the poor, in order to fund another bailout to Eskom."

READ: More money for cash-strapped Eskom but with strict conditions, says Mboweni

Mboweni rounded off the debate by highlighting the reality of the fiscus. "The debt-to-GDP ratios are at unacceptable levels, this provides a basis for a serious crisis in the country. We need to approach this bill against the background of these difficulties we confront," he said.

Mboweni said financial management at various levels (whether local, provincial or national government) need to be improved. "We need to approach the budget with responsibility and focus," he said.

Mboweni said once the bill is passed, government will be in a position to use its contingency reserve account to provide support to various state-owned enterprises like the SABC, Denel and SAA. He stressed that funds will not be made available without conditions - but will be released in chunks, provided that certain conditions are met to ensure there is actual progress at organisations. 

Treasury will brief the select committee on appropriations, which is part of the NCOP, on the bill on Wednesday. 

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