Tariffs would have had to increase to service debt caused by nuclear deal – Fuzile

Speaking during the first day of testimony of this week’s proceedings of the inquiry into state capture, former director general Lungisa Fuzile revealed that tariffs would have had to increase to service the debt caused by getting into the nuclear deal.

Fuzile was testifying on issues relating to the nuclear deal, SAA, PetroSA, the Engen deal and social grants, therefore giving evidence that corroborates the testimony of previous state capture witnesses.

Fuzile is returning to the stand after first appearing last year when he testified about what occurred in the days leading up to former finance minister Nhlanhla Nene’s firing in 2015.

Today, he revealed that the aforementioned issues were said to have “brought dissatisfaction” to then president Jacob Zuma with the work of Treasury.

Maleka says on para 40 of Fuzile's statement, talks about the rumours that the President was not happy regarding the Budget processes and what was done to move Budget process to another entity. #StateCaptureInquiry

— State Capture Commission (@StateCaptureCom) February 18, 2019

Fuzile says during his tenure at National treasury the former President Zuma was unhappy with the work of Treasury. #StateCaptureInquiry

— State Capture Commission (@StateCaptureCom) February 18, 2019

According to Fuzile, the dissatisfaction came from the fact that Treasury was not signing off on some deals that it was requested to as they were not in line with the rules of procurement processes.

#StateCaptureInquiry Fuzile says Treasury was asking the tough questions, conducting due diligence on the impact of projects on the entire economy, the long-term implications in terms of tariffs, and these questions would displease certain people and stir their dissatisfaction.

— Erin Bates (@ermbates) February 18, 2019

In addition to the rules of procurement processes, Treasury had to consider the financial implications and fiscal risks of greenlighting some of the suggested projects. One such implication would have been the exponential increase in tariffs in order to service the debt incurred by approving the nuclear project.

Fuzile says they insisted on thorough process because of how expensive some of these projects. He said treasury had to pay due diligence on the impact of projects on the economy, the long term implications in terms tariffs. #StateCaptureInquiry

— State Capture Commission (@StateCaptureCom) February 18, 2019

Taking the example of nuclear, Fuzile says government would have to inject cash into whatever entity would have implemented the project. The government would have to borrow money to do this. This debt would burden future generations, Fuzile says #StateCaptureInquiry

— ugh (@Sarah____Smit) February 18, 2019

As such, there was talk of moving budget responsibilities to another state entity.

Fuzile’s testimony continues at the state capture commission, with questioning being lead by advocate Vincent Maleka.

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