Eskom ‘too important to fail’, gets R17bn from Treasury

Eskom ‘too important to fail’, gets R17bn from Treasury

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The meeting, noting the challenges at Eskom and the need for urgent solutions, agreed that the entity was too important to not be supported.

National Treasury on Wednesday briefed a joint meeting of the Standing and Select Committees on Appropriations on the Minister of Finance’s authorisation of a R17,652 billion payment to Eskom in April, as well as on the Appropriations Bill, the committee said in a statement.

National Treasury told the meeting that Eskom had experienced difficulty in servicing its debts and meeting its redemption requirements, which could have had negative consequences for both Eskom and the national fiscus.

Sections of the Public Finance Management Act (PFMA) enable the Finance minister to authorise funds in emergency situations.

National Treasury said that the allocation was necessitated following a delay in a commitment of R7 billion from the China Development Bank, as well as a “decline by the Corporation for Public Deposits to provide a bridging facility”.

R17,652 billion is the maximum the PFMA allows and is part of a R23 billion allocation announced in the 2019 budget tabled in February, the statement said.

The committees also said National Treasury would table later in the year a Special Appropriations Bill for additional funds to support state-owned companies.

“The meeting, noting the challenges at Eskom and the need for urgent solutions to these, agreed that the entity was too important to not be supported,” the statement said.

One of the major concerns raised was the job-losses that could result from Eskom’s restructuring process and co-chairperson of the committee, Dikeledi Mahlangu said cooperation between Eskom and the Labour Department was vital to ensure job losses were kept to a minimum during restructuring at Eskom.

“We understand that Eskom is not just too big to fail, it is also too important for the economy,” co-chairperson Sfiso Buthelezi said.

“The committee would thus like the Special Appropriations Bill to be accompanied by clear plans on Eskom’s unbundling process and concrete plans to address the challenges facing the entity,” the statement said.

African News Agency (ANA)

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