Parliament, Tuesday, 10 September 2019 – The Standing Committee on Appropriations; the Select Committee on Appropriations; and the Portfolio Committee on Public Enterprises were briefed by Eskom on the Special Appropriation Bill.
The Bill relates to the proposed special allocation of R59 billion to the Department of Public Enterprises for Eskom’s financial requirements. The request was made by National Treasury through the Minister of Finance’s tabling of the 2019 Special Appropriation Bill [B10-2019] in Parliament in July 2019.
The Special Appropriation Bill is a section 77 Bill, which seeks to appropriate additional money from the National Revenue Fund (NRF) for requirements of the Department of Public Enterprises, to assist Eskom with its financial obligations.
The Chairperson for the Select Committee on Appropriations, Ms Dikeledi Mahlangu, welcomed the frankness of the presentation by Eskom and the openness of the challenges that the entity is faced with.
Ms Mahlangu appreciated the turnaround strategy that the power utility presented but indicated that Eskom should not be despondent on the comments by the members, “Do not be discouraged by the criticism of the turnaround strategy by the committee, as in past there have been numerous turnaround strategies that have been presented without any success,” she said.
Eskom in its presentation said the two power stations Kusile and Medupi will be completed in five years. The committee said it will hold the power utility accountable to the five years that it has committed itself to completing the power stations.
The committee was of the view that bailouts that will be approved will not be a blank cheque, conditions must be crystal clear and measurable. The committee expressed its concern over the escalating debt of the power utility, amounting to R450 billion. The committee indicated that giving bailouts to Eskom has become a norm. The committee warned against being held to ransom by the power entity under the narrative that Eskom is too important to fail.
Committee Chairperson for the Standing Committee on Appropriations, Mr Sfiso Buthelezi, said the state should not pay for the inefficiencies of Eskom.
“What is of importance from the engagement by the various committees is to get assurance from Eskom, as to who will benefit from the Special Appropriation Bill? Will there be value for money and will there be any loss of jobs,” Ms Mahlangu said.
Mr Buthelezi emphasised and reiterated that the committees will have their separate engagements with Eskom so as to further interrogate and follow up with the power utility on the Special Appropriation Bill.
On the capacity of the department to deal with Eskom, Minister of Public Enterprises Mr Pravin Gordhan said they are building capacity within the department to deal with issues and provide effective and efficient support for Eskom. Mr Gordhan said Eskom is vital to the country and in the future, and with the right support “we will make the power utility succeed and there will be an Eskom in future”.
On Independent Power Producers (IPPs), Minister Gordhan said studies have shown that going forward, the cost of renewable energy will be cheaper as compared to coal, but alluded to the fact that the early IPPs were expensive.
ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSONS FOR THE STANDING COMMITTEE ON APPROPRIATIONS, SELECT COMMITTEE ON APPROPRIATIONS, AND PORTFOLIO COMMITTEE ON PUBLIC ENTERPRISES, MR SFISO BUTHELEZI, MS DIKELEDI MAHLANGU AND KHAYA MAGAXA.
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Parliamentary Communication Services
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