Eskom fails to publicise China loan terms and conditions within 30-day PAIA period

Issued by Mmusi Maimane – Leader of the Democratic Alliance
28 Oct 2018 in News

The DA will not allow China’s model of “debt trap diplomacy” to take root in South Africa, and we will approach the courts if necessary to ensure that government is transparent with the public about the terms and conditions of loans received from China.

On the 10th of September, I submitted a Promotion of Access to Information Act (PAIA) request for the terms and conditions of the R33 billion loan from the China Development Bank (CDB) to Eskom to be made public. In terms of the Act, Eskom had 30 days to answer to my request for this information. This deadline has passed, and the terms and conditions of the loan remain suspiciously secret.

I have therefore submitted a Notice of Internal Appeal to Eskom in terms of section Section 75 of PAIA for not granting my request for access to the terms and conditions of the loan. If Eskom fails to honour the further 10-day deadline set by this Notice of Appeal, the DA will not hesitate to take the necessary legal action and approach the courts for relief.

In addition, I have formally approached President Cyril Ramaphosa, Eskom Chairperson, Jabu Mabuza, and CDB Liaison in South Africa, Jiangtao Cao, none of whom have been willing to play open cards and disclose the terms and conditions of this R33 billion loan. South Africans need to be assured that this loan does not tie our country and taxpayers to unaffordable and unfair terms and conditions. We will not allow China’s model of “debt trap diplomacy” to take root in South Africa.

President Ramaphosa has committed his administration to greater transparency and accountability. However, when pressed with a real example like this loan, he has chosen to follow the path of secrecy that was entrenched under President Zuma. This is an opportunity for President Ramaphosa to play open cards with the public about what this loan commits us to, and we expect him to do so.

Finance Minister, Tito Mboweni’s, maiden Medium-Term Budget Policy Statement (MTBPS) this week confirmed that ‘Eskom’s weak financial position remains a risk that could lead to a call on guarantees.’ After Eskom made a R2.3 billion loss with R41.5 billion gross finance costs and over R20 billion in irregular expenditure in the last financial year, there is reasonable doubt as to Eskom’s ability to pay back this R33 billion loan to the CDB.

If Eskom and the failing ANC government refuse to open the books on this loan, the DA will not hesitate to take the appropriate legal action.