In a statement on Thursday, the DA said Finance Minister Tito Mboweni had, without much fanfare, handed parliament the details of a R17.652 billion “emergency” bailout of Eskom.
DA MP Alf Lees said Mboweni had needed to table the report according to public finance laws, but had allegedly attempted to sneak it to the relevant committee without much fanfare “to hide the true extent of this crisis”.
Lees said the first R5 billion from the total amount was already paid to Eskom on 2 April.
In his budget statement in February, Mboweni had announced R23 billion in additional funding for Eskom annually for the next three years.
“Minister Mboweni indicates in his report that the amount was limited to R17.652 billion by Section 16 (2) of the Public Finance Management Act (PFMA), which limits such ’emergency’ funding to a maximum of 2 percent of the appropriated national budget. This clearly indicates that the cash crisis at Eskom is far worse than the R17.652 billion and that the amount would have been far greater had this limitation contained in Section 16 (2) not existed or was higher.”
Lees said that despite the fact that elections were less than three weeks away, there was now an urgent need for the parliamentary committees of finance, appropriations and public enterprises to hold a joint meeting to be fully briefed on the financial crisis facing Eskom, and to provide a report with recommendations to parliament.
Lees said he had written to Yunus Carrim, the chair of the standing committee on finance, to request such a liquidity briefing.
Parliament is no longer sitting due to parties campaigning ahead of elections on May 8.
“It has long been public knowledge that Eskom is bankrupt,” said Lees. “The entity had run out of cash to keep its operations going a long time ago and has been fighting to keep providing electricity desperately needed to keep economic activity going and to avoid a recession. It is extraordinary that this crisis was so obvious that even Minister Mboweni was forced to include a current year bailout for Eskom of R23 billion, but failed to introduce a special appropriation bill to ensure the funds were available for Eskom to keep the lights on.
“In today’s report to parliament, Minister Mboweni states that ‘… by the end of March 2019, it became evident that Eskom was experiencing difficulties in raising the required funding as well as drawing down on existing facilities’.
“Two days later Eskom was paid a bailout of R5 billion.
“It is extraordinary that a letter dated 19 March 2019, and received from the Minister on 17 April 2019, made no mention of the pending cash crisis. Yet in his section 16 of the PFMA report to parliament dated 16 April 2019, Minister Mboweni states that ‘[i]n its current form, South Africa’s state-owned power utility is not financially sustainable, nor can it meet the country’s electricity needs’.”
Lees said none of this could have come as a surprise to Mboweni, and the matter should have been handled before the fifth democratic parliament was officially dissolved.
“Surely there was adequate indication that a special appropriation bill was required to be passed by parliament on an urgent basis before the end of the first quarter of the 2019 parliamentary session.
“If this did come as a surprise to the minister in the same way that so many of ANC failures have come as a ‘surprise’ to Cyril Ramaphosa, president of South Africa, then there would seem to be a breakdown of communications between the minister of finance, Eskom and Public Enterprises Minister Pravin Gordhan, or perhaps a deliberate attempt on the part of Eskom to conceal the extent of the crisis.”
What was evident, Lees alleged, was that the ANC would “plunge the country into debt, just to keep the lights on for the next 20 days until Election Day”.
(Edited by Charles Cilliers)