Eskom Debt Relief Bill moves a step closer to becoming a law

The Eskom Debt Relief Bill is one step closer to becoming a reality after the draft legislation was greenlit by Parliament’s Select Committee on Appropriations.

The bill was adopted by the committee on Wednesday.

This paves the way for the proposed law to head to the National Council of Provinces (NCOP) for a debate and vote before it is sent to President Cyril Ramaphosa for approval.

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The draft legislation, which proposed by Minister of Finance Enoch Godongwana in February, will see National Treasury taking over a portion of Eskom’s R422 billion debt.

At least R78 billion will be made available for the 2023/2024 financial year, followed by R66 billion in 2024/2025, and R40 billion in 2025/2026.

This means the embattled power utility will be provided with R254 billion in debt relief.

Municipal debt

While Select Committee adopted a report on the bill, it has recommended to the National Treasury, the Department of Cooperative Governance, and Eskom’s board to determine, which municipal debt was either recoverable or not before writing off the power utility’s debt.

Eskom’s municipal debt stands at R56.3 billion as December 2022.

“The committee would like to see Parliament intensifying its oversight to ensure that the debt relief package conditions are effectively implemented,” the committee’s chairperson, Dikeledi Mahlangu said on Thursday.

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The committee also urged the departments as well as the South African Local Government Association (Salga) to ensure all municipalities that owe Eskom develop a plan to make sure that all profits generated from electricity tariffs were ring-fenced and, in turn, used to pay the utility’s debt.

It further suggested that this must be done within 90 days of the adoption of the bill by the NCOP.

“The committee further recommended that either legislation or, if needs be the Constitution, is amended to enable National Treasury to slice off monies owed to Eskom by municipalities before transferring their equitable share,” Mahlangu said.

“Furthermore, the committee does not believe that privatising Eskom will solve all the entity’s problems, and that options such as public-private partnerships should instead be explored.”

Oversight

Meanwhile, the Select Committee raised concern regarding the lack oversight on the Electricity Ministry.

Electricity Minister Kgosientsho Ramokgopa’s department does not have its own budget and will rather draw its funds from the Presidency.

Similarly, there is no parliamentary committee overseeing the Presidency.

“It is of the view that this might compromise the oversight role of Parliament over this department, given the absence of an oversight committee over the Presidency,” Mahlangu added.

The Eskom Debt Relief Bill comes amid persistent rolling blackouts, which leave households and businesses without power daily.

Ramokgopa last month warned that load shedding would result in more than 850,000 job losses.

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