ID'S LANCE GREYLING WANTS MATTHEWS PHOSA TO COME CLEAN ON WHETHER ANC WILL BENEFIT FINANCIALLY FROM ELECTRICITY TARIFF INCREASES

‘Has the ANC lived up to its promise of divesting its shares in Hitachi Africa?'

Lance Greyling, the ID spokesperson for energy, has called on ANC Treasurer-General Matthews Phosa to come clean over whether the ANC stands to benefit financially from the proposed 35% electricity tariff increase per year for three years.

Much of the increases will be used to fund the construction of the coal-fired Medupi and Kusile power stations, in Limpopo and Mpumalanga respectively.

‘The biggest component of this expenditure is for boilers for the two power stations, a contract worth R38 billion (in 2008) that was awarded to Hitachi Africa, which the ANC's front company, Chancellor House, had a 25% stake in at the time,' Mr Greyling says.

‘This means that through Chancellor House the ANC's share of the deal was worth R5.7 billion, notwithstanding the fact that since then cost estimates have almost doubled,' says Greyling.

Current estimates are that costs have risen from R78 billion to R120 billion and R85 billion to R142 billion for Medupi and Kusile respectively.

Greyling says that despite assurances to the media from Phosa in February 2008 that the ANC would divest itself from the deal in a "transparent" fashion, it remains unclear whether the ANC has in fact done so.

Phosa said at the time that Chancellor House would appoint bankers to advise it on how to exit the deal.

"There will be no deals in the corner. It will be very transparent. It will be handled by a reputable bank," Phosa said.

He added that the decision to exit the deal was reached because "governance is an issue and there is public focus on this."

‘Ethical behaviour should not only be practiced because there is public focus on a deal or organisation, it should be maintained at all times. The ID is now wondering whether the shift of public focus away from the ANC's role in the deal means that Phosa and the ANC leadership have lost interest in doing the right thing,' Greyling says.

‘The ID therefore calls on the ANC to provide proof that it has lived up to its promise and that consumers will not be indirectly funding the ANC through the proposed electricity price increases.

‘Until then, based on past practice by the ANC, including the Arms Deal, Oilgate and a number of other transactions that helped fund the ANC's election campaign budget, the ID will expect the worst,' says Greyling.

‘The ID also calls on the Department of Public Enterprises to table legislation concerning the conduct of business between public entities and political parties. This was one of the recommendations made by the Public Protector in his initial investigation of this deal.'

Greyling says the ID will be asking the Minister a parliamentary question over when this legislation will indeed be tabled in Parliament.

‘This issue also yet again raises the urgent need for comprehensive legislation regulating political party funding in South Africa,' Greyling says.

‘The ID will therefore reintroduce its motion in Parliament for the establishment of an ad hoc committee to draft legislation for the regulation of political party funding.'

Statement issued by Lance Greyling, Independent Democrats spokesperson on energy, January 18 2010

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