‘Eskom is complicated’: Godongwana denies PFMA exemption meant to protect politicians

Finance Minister Enoch Godongwana has dismissed the suggestion that Eskom’s exemption from the Public Finance Management Act (PFMA) was meant to protect politicians.

Godongwana was responding to questions from MPs following deliberations on the exemption, which would mean Eskom would not have to disclose irregular, wasteful and fruitless expenditure in its annual financial statements for three years.

The minister had signed a special government gazette of the exemption on the last day of the government’s financial year on 31 March.

A similar exemption was granted to Transnet last year.

‘Fiscal sustainability’

During Wednesday’s joint meeting with various parliamentary committees, Godongwana decided to withdraw the exemption temporarily in order to have further consultation with the auditor-general and Eskom’s auditors.

“National Treasury met with the AG on Tuesday, where the AG made comments which will now be framed in the gazette. We have withdrawn the gazette temporarily so that the framing of the gazette is appropriate to ensure mismanagement and corruption are prevented,” he told Parliament.

The minister sought to explain why the exemption was acceded to in the first place after the decision sparked public uproar, saying Eskom would be required to disclose its expenditure mainly in its annual report rather than in the financial statements.

ALSO READ: ‘Whoever advised you, misled you minister’: MPs want Eskom exemption withdrawn permanently

He said Eskom’s constrained financial position was considered as it would have an affect on the power utility’s ability to raise capital.

While he welcomed the constructive criticism from MPs, Godongwana dispelled the notion that there was someone calling the shots behind the scenes.

The minister revealed that he sought independent legal advice before taking a decision on granting the exemption.

“I’m not trying to justify anything, but I’m saying the intentions are generally good for fiscal sustainability,” he said.

Watch the meeting below:

‘Eskom is complicated’

Godongwana also denied that Treasury was trying to protect politicians, who have been accused of corruption at Eskom.

“Part of the difficulty, which we understand, is the toxic environment surrounding Eskom [and this] sometimes may cloud the substantive issues.

“Interesting enough, one of my colleagues said ‘are you hiding [André] de Ruyter’ and [Police] Minister [Bheki] Cele said ‘oh, are you exempting my criminals from prosecution and me arresting them’,” he continued.

READ MORE: Eskom’s PFMA exemption and minister’s corruption denialism a worrisome combo

“There’s no intention on our part to hide any corrupt activities.”

The minister further admitted that there was not extensive consultation with the auditor-general on the Eskom exemption, unlike what Treasury did with Transnet.

“Eskom is complicated in a sense that although we made the same provision for Transnet, it didn’t have any state guarantees and therefore, our exposure to Transnet is not the same as Eskom.”

State of disaster

On Wednesday, government also confirmed that it has officially terminated the national state of disaster it implemented just under two months ago to deal with South Africa’s energy crisis.

Minister of Cooperative Governance and Traditional Affairs Thembi Nkadimeng gazzetted the termination on Wednesday morning.

However, the interventions and support measures already in place as an accelerated response at the time the state of disaster was declared will remain in place.

Eskom, meanwhile, has declined to comment on both the exemption and ending the state of disaster at this stage pending its engagement with government.

NOW READ: Supplying electricity Ramaphosa’s constitutional duty, not municipalities’, court told