The Portfolio Committee on Public Enterprises heard that there are talks taking place on the possible wipe-out of the R18 billion municipal debt owed to Eskom by municipalities. The Department of Public Enterprises was briefing the committee on Wednesday on the first and second quarter performance plan.
The department said this is one amongst the issues that is being discussed to try and resolve the problem of defaulting municipalities, but nothing has been finalised.
A committee member, Mr Moss Tseli, said it cannot be right that there are municipalities that are paying and there are those who will have their debt wiped out as there are municipalities who have kept their payment commitments.
The committee said the department needs to be on board in order to address the challenges that Eskom has with municipalities.
Mr Narend Singh, a committee member, said the power utility is owed a lot of money by municipalities and this renders the company cash-strapped. “The department needs to make a follow-up with municipalities that have made a commitment to pay but did not pay. The problem is more than the power utility, the department needs to get involved,” said Mr Tseli.
On the issue to reform state-owned companies (SOCs), the department said it is drafting and developing an SOC Bill that will seek to address concerns raised by the committee about the need to improve oversight over SOCs, the ability of government to hold the SOCs to account and the process for the appointment of boards.
The department informed the committee that regarding the development of the SOC reform policy for the first and second quarters, consultation with government and external stakeholders has not yet been achieved. However, the department will finalise the development of SOCs reform policy for consultation. Once the policy is finalised, the department will draft the Bill which will be tabled in Parliament.
The committee wanted an update on the South African Airways (SAA), Mr Singh said the committee is aware that SAA’s political responsibility has been transferred back to the department but sought to know if the department is aware of any discussions with private partners. Furthermore, Mr Tseli questioned if there had been a handover process from National Treasury to the department on the state of the company. “You cannot receive a company without a handover report, this is concerning you should insist on the report on the state of SAA when it was handed over,” said Mr Tseli.
The Chairperson of the committee, Ms Lungi Mnganga-Gcabashe, said what is missing on the report are plans in place by the department to address targets that the department has failed to achieve. “What are you doing about targets that are not met, the department needs to indicate how it plans to mitigate the targets that have not been met,” she said.
Regarding Denel and Eskom, the committee said the department needs to provide guidance in the ongoing financial challenges at Denel and shortages of coal at Eskom’s mining companies.
The department said the problems at Denel are bigger than the arms manufacturing company, as some suppliers have not been paid. The department explained that with good leadership, the company can be turned around and that is starting to happen to the new board which is in place.
By Yoliswa Landu
14 November 2018
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