Foreign governments owe Eskom more than half a billion in outstanding payments

Issued by Natasha Mazzone MP – Chief Whip of the Official Opposition
07 Nov 2019 in News

In a reply to a Democratic Alliance (DA) Parliamentary question, the Minister of Public Enterprises, Pravin Gordhan, revealed that Eskom is owed R632 million in outstanding payments by foreign state-owned power utilities. A breakdown of the debts can be seen below:

While the Minister might be of the view that this R632 million will have a minimal impact on Eskom’s cash flow, the reality is that every cent counts when the power utility has a mountain of debt in the area of more than R420 billion. Half a billion Rand is an astonishing amount of money and could, in the long term, go a long way in stabilising the financial woes at Eskom.

As such, the DA has written to Minister Gordhan to request that he makes public the payment plans that Eskom has with these foreign governments which owe the utility millions in unpaid debt. The public needs surety that Eskom and indeed National Government is truly doing the necessary work to ensure that these outstanding debts are being collected.

In addition to this half a billion Rand owed by foreign governments, the power utility is also owed close to R20 billion in outstanding debt from municipalities across the country. Clearly Eskom is incapable of collecting debts both at home and abroad. This begs the question, does Eskom actually have plans in place to collect debts owed to it? If not, the utility will never be able to stabilise its cash flow, and the taxpayer will continue to pay for bailout after bailout.

The Minister has cited economic and political challenges as well as financial constraints as reasons for the non-payment . However, at the end of the day it is inconceivable that Eskom is willing to hold South Africans to ransom with the burden of rolling blackouts while it is supplying electricity to foreign governments who are not even paying for it.

With the threat of rolling blackouts ever present, Eskom should first meet its obligations here at home before it can ever think of overextending itself through power supplies to other countries.

It is also telling that the foreign governments which are failing to settle their Eskom debts, are governments with close ties to the ANC. The DA warns the governing party against allowing its mindless pursuit of regional solidarity to push Eskom further to the brink of collapse.