Weekend
Potential BBM: Is this state entity partly to blame for SA's economic woes?
The Organisation Undoing Tax Abuse (Outa) is calling for a forensic audit of Eskom, blaming it for the downgrade by Standard & Poors.
“Following on yet another vote of no-confidence on Eskom’s financials and governance manifesting in an S&P downgrade this weekend, Outa believes it is high time for all concerned South Africans to rally for a full forensic audit into Eskom. Further to several institutions having signaled their concerns with Eskom’s improprieties, it is clear that years of financial mismanagement have led to the need for unacceptably high and economy damaging electricity tariff hikes, combined with government (taxpayers') financial guarantees – approximately R358bn, to support its balance sheet and keep the beleaguered institution on its feet,” said Wayne Duvenage of Outa.
“Under any normal circumstances, the need for suretyships by lenders would immediately signal that borrowings have exhausted their own balance sheet, and that extreme caution is required with forward financial lending. Yet in Eskom’s case, the result was the extreme opposite as this state-owned entity has gone on a spending spree that will require another R500bn over the next five years, and a further R1 trillion plus thereafter, if they are allowed to proceed with the nuclear power project.
“Eskom’s rising debt levels are likely to drive the electricity price beyond [the reach of] most consumers and this in turn is a serious risk which could lead to Eskom’s demise, as more people and businesses switch to cheaper domestic energy alternatives and improved energy efficiency,” he continued.
“Couple the above with numerous cases of fraud and irregular expenditure over various public forums over the past decade, combined with the gross over-spend and delays in sizable capital expenditure projects, [and] it becomes clear that this state-owned entity (SOE) has been abused for some time now. The damning findings of the previous Public Protector in the State Capture report also point to serious concerns within Eskom.
“A Forensic Investigation into Eskom will provide clarity and insights to many questions which, if [they] remain unanswered, will not do the nation or Eskom any favours as we grapple with its economic survival and ability to meet the nation’s future energy needs,” Duvenage concluded.
