Madame Speaker,
Eskom has a gun to the head of this government, ready to pull the trigger on a sovereign debt crisis at any time if National Treasury does not do its bidding.
Every citizen is a hostage of Eskom. We are a hostage to rolling blackouts, which causes massive economic losses. We are a hostage to their bailout demands. We are hostage to their endless management crises.
Eskom is not even capable of holding on to a CEO, to the point where the board chair is the acting CEO. An entity riddled with corporate governance challenges now has the person meant to hold its management to account as the head of its management.
There are days when I ask myself if Eskom is physically burning money rather than diesel.
Losses at Eskom have accelerated from R2.3 billion last year to R21 billion this year. At the same time, outstanding municipal debt to Eskom has accelerated to R20 billion. Most of this emanates from municipalities in the Free State – or, dare I say, Mr Magashule’s Gangster State.
It is interesting to note, Speaker, that the Parliamentary programme originally had planned to pass this Special Appropriation Bill with the adjustment budget in December, but our hostage takers at Eskom demanded their money by the end of October. This meant there were many joint meetings with the NCOP committee considering this bill and a fast tracking of the bill today, waiving the three-day rule from the passage of the committee report. In this context, one wonders of the return of power cuts was not akin to our hostage takers ensuring they get their money by their own deadline.
In its present form, this one-page bill will hand R59 billion in ransom money over from the fiscus to Eskom over two years, in addition to the R23 billion a year already allocated to Eskom for the next decade. I call it ransom because it is unconditional – the bill allows the Finance Minister to transfer money to Eskom without any pre-conditions to be met. The DA offered several amendments to this bill, including a provision that for as long as Eskom receives bailouts, its executives do not get bonuses. The public are tired of seeing their schools, hospitals and clinics crumble while SOEs consume resources meant for the poor and reward their mismanagement with bonuses.
Another DA amendment that was rejected was that Eskom review all of its procurement contracts to eliminate cost inflation that originated as a result of deals signed to benefit the Guptas and other state capturers. Eskom’s coal price contracts show that some companies charge double the price other companies do for similar quality coal – with the cost inflation here reaching some R10 billion a year.
The DA amendments were rejected because they are supposedly contained in Eskom’s ninepoint plan.
Simply put, instead of using the full might of the law to force Eskom to do the right thing, this Parliament wants to trust the same people who lost R21 billion last year and can’t keep the lights on to adhere to yet another turnaround plan. The management of Eskom is so poor that at the start of this month, Fitch downgraded Eskom’s standalone credit rating to junk.
The bill, in its present form, is a blank cheque for more of the same. It rewards a culture of state capture and theft. It diminishes the importance of oversight and accountability for public money. It allows Eskom to continue to hold a gun to the heads of our citizens, our businesses and our government.
The only way out of this mess is to follow the very sensible proposals in the national treasury economic strategy document, diversifying our generating capacity away from coal, and finally, privatizing generating capacity. Without this, we will be bailing Eskom out for the next 100 years.