Government gave Eskom R23bn-blank cheque

12 November 2019

National Treasury gave Eskom R23-billion in equity from the 2019/20 budget without any conditions or requirements to clean up its act and keep the lights on. This information was gleaned from a reply to a parliamentary question I tabled which also showed that this was the first time such cash injections and government guarantees have been transferred unconditionally.

What makes this particularly troubling is that the 2019/20 Appropriation Bill specifically gave Finance Minister Tito Mboweni explicit authority to impose conditions onto any amounts transferred to Eskom and other government entities. Considering the dire need to clean up Eskom in every area, ranging from management to procurement, it seems odd that the minister would fail to exercise his legal prerogative.

Eskom, therefore, was given R23bn of additional taxpayer money to spend as it pleases – on anything it likes, from executive bonuses to catering, while South African’s have to contend with constrained energy supply hampering economic growth and job creation, and constantly living under the threat of rolling blackouts.

Eskom is scheduled to receive R23bn per annum in taxpayer support for the next decade, with an additional special appropriation giving Eskom a further R59bn over the next two years. Government Ministers give hard speeches about Eskom and the fact is that, at its current trajectory, it will trigger a sovereign debt crisis. This unconditional bailout demonstrates that behind scenes, these ministers show scant concern for the situation.

For an entity that is threatening to send the South African economy to the abyss, it is highly irresponsible for the government to let Eskom do as it pleases without any accountability on how it is spending taxpayers money. South Africans are being made to pay twice for energy, through their electricity bills and again through their taxes while policing, healthcare and other public services remain under-resourced.

The DA reiterates that its position is for Eskom to be separated into different generating and distribution businesses, as well as for private competition to be introduced to electricity generation in South Africa to ensure energy security.

The DA will be writing to Minister Mboweni to urgently demand he exercises his legal authority to impose conditions onto all taxpayer money transferred to Eskom.

Issued by Ashor Sarupen, DA Member of the Standing Committee on Appropriations, 12 November 2019