Ts & Cs of China’s loan to Eskom may finally be laid bare

Government’s stubborn silence over the terms and conditions of China’s R33 billion loan to Eskom could be broken with a request under the Promotion of Access to Information Act by the Democratic Alliance (DA).

“On August 24, 2018 I wrote to President Cyril Ramaphosa requesting he table the full R33 billion loan agreement Eskom recently signed with the China Development Bank [CDB], with all its material terms and conditions, in the national assembly within 14 days. The president has yet to do so,” DA leader Mmusi Maimane wrote in a statement yesterday.

“I will therefore submit a request to Eskom in terms of the Promotion of Access to Information Act (PAIA), for the terms and conditions of this loan to be made public. This record needs to include the interest rates agreed to, repayment terms, guarantees, default terms, total amount payable, loan amount, total interest charged and annual percentage rate.”

Maimane noted South Africa’s repayment liability could not remain cloaked in secrecy, and if Ramaphosa was “as confident about this loan as he is about the government’s economic stimulus package, he should have no problem with disclosing the T&C’s of the Eskom-CDB loan”.

South Africa’s national debt this week crossed the R3 trillion barrier, with Eskom’s debt now at R600 billion, according to Business Insider.

This puts Eskom’s debt at more than the country’s “entire income from personal income tax [R556 billion]”. On top of the R600 billion debt comes the R33 billion loan from China.

Eskom is hoping to find the money to repay its debt by raising customer tariffs. Section 32 of the constitution states everyone has the right of access to any information held by the state; and any information that is held by another person and that is required for the exercise or protection of any rights.

In an extract on fact checking site Africa Check from A Practical Guide to Media Law, published by Lexus Nexus and written by Dario Milo and Pamela Stein, the two say: “As with the right to freedom of expression, it is trite to say that access to information is fundamental to a healthy democracy.”

They quote Chief Justice Mogoeng Mogoeng in the Constitution al Court saying during a case: “To give effect to [the] founding values [of our democracy], the public must have access to information held by the state. Indeed, one of the basic values and principles governing public administration is transparency.

And the Constitution demands that transparency ‘must be fostered by providing the public with timely, accessible and accurate information’.” Milo/Stein noted there were several grounds for possible refusal, including privacy of a third party, commercial information of a third party or of the body itself, and national security.

However, they said if the information requested was in the public interest, even national security classification could be overridden if “the public interest override conditions are met”.

Beijing’s cumulative loans to Africa since 2000 amounted to nearly R2 trillion by 2016, according to figures compiled by the China-Africa Research Initiative (Cari) at Johns Hopkins University School of Advanced International Studies in the United States, dw.com reported.

“Half of those loans were given in the past four years,” Janet Eom, an associate researcher at Cari, told the website. “So Africa’s debt to China is becoming more of a concern moving forward.” DA spokesperson Portia Adams said Maimane’s next move depended on what Eskom’s response to the PAIA request was.

Eskom spokesperson Khulu Phasiwe did not reply to The Citizen’s request for comment on the DA’s PAIA request.

– amandaw@citizen.co.za