Treasury given 60 days to figure out how it will clear Eskom’s R254bn debt

The Eskom Debt Relief Bill has been passed by the National Council of Provinces (NCOP), paving the way for the draft legislation to becoming law.

At least 30 MPs voted in favour of the bill, while 18 voted against it on Wednesday.

President Cyril Ramaphosa will now have to put pen to paper for the legislation, which will see National Treasury taking over a portion of Eskom’s R422 billion debt, to be enacted.

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According to the bill, 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 Eskom will be provided with R254 billion in debt relief.

The adoption of the bill by NCOP comes after Eskom agreed to a 7% three-year wage deal with its workers last week.

‘Comprehensive plan’

On Wednesday, NCOP’s Select Committee on Appropriations chairperson Dikeledi Mahlangu told MPs the committee recommended that National Treasury provide a detailed plan within 60 days of the bill’s adoption.

“National Treasury must provide a comprehensive plan on the process by which government intends to directly take R70 billion from Eskom’s loan portfolio in 2025/2026 financial year as determined by the Minister of Finance which is in addition to the R40 billion in the same year,” she said on Wednesday.

Mahlangu said the committee also recommended that the National Treasury, the Department of Public Enterprises, the Minister of Electricity Kgosientsho Ramokgopa and the Department of Cooperative Governance ensure that load shedding was urgently resolved in order to “unlock investments and job opportunities”.

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“We have recommended that the National Treasury and the Department of Public Enterprises should ensure that cooperate and fiscal government is improved through reform that enables management and boards of state-owned entities [SOEs] to operational autonomy they require to make profit maximising decisions and eliminate political interference to enhance operational transparency and efficiency.”

She further highlighted that the committee was against the privatisation of any SOEs including Eskom.

“National Treasury, together with the Department of Public Enterprises, should come up with a clear plan within 60 days of the adoption of this report to ensure that decisive judgment is made for state-owned entities to deliver on return to investment effectively and efficiently, failing which dysfunctional SOEs should be restructured sold off or shut down to save the taxpayer’s money.”

Watch the meeting below:

Mahlangu added that Eskom’s board and government should to deal with “fiscal leakages” such as corruption and crime at the power utility.

Finance Minister Enoch Godongwana initially proposed the bill during his Budget Speech in February this year to resolve Eskom’s debt burden and to attract investments which will help restore fiscal credibility.