Eskom among SOES to get billions in government bailouts

ALTHOUGH many households were happy to have Eskom keep the lights on throughout the weekend, civil society organisations are frowning on the government’s decision to take over a portion of the power utility’s R400-billion debt.

The bailout has been labelled “a waste of taxpayers’ money” towards an entity riddled with corruption and mismanagement.

In his Medium-term Budget Policy Statement on Wednesday, Finance Minister Enoch Godongwana admitted that for over a decade billions had been spent supporting the power utility, but little improvement had been made and the power supply remained unreliable. Once the takeover had been finalised it would ensure Eskom’s financial sustainability, he said.

“While the selection of the relevant debt instruments and the method of effecting the relief is still to be determined, the quantum is expected to be between one-third and two-thirds of Eskom’s current debt,” Godongwana said. “The programme will allow Eskom to focus on plant performance and capital investment, and ensure it no longer relies on bailouts.”

He explained that the takeover would include strict conditions during and after the debt transfer. “These conditions will address Eskom’s structural challenges by managing its costs, addressing municipal and household arrears due to the utility, and providing greater clarity and transparency in tariff pricing,” he said.

Other recipients of bailouts include Transnet, which will be allocated R2.9bn to ensure the return of out-ofservice locomotives. Denel will receive R3.4bn, while SANRAL gets R23.7bn from the national fiscus, which will be disbursed with strict conditions.

In addition, ethekwini Municipality will receive R2.9bn to restore the city after the April floods.

“Funding will now come with strict pre- and post conditions. Pre-conditions mean that SOES will need to comply before they receive government support, and non-compliance means no funding,” he said.

Abigail Moyo, spokesperson for the trade union UASA, said they frowned on the additional funds allocated to Eskom, Denel, Transnet and SANRAL. “After years of bailouts, the SOES still fail to achieve their most basic standards, while corruption and mismanagement continue unabated and unpunished,” she said.

Riefdah Ajam, general secretary of the Federation of Unions South Africa, said the power utility’s continued failure to provide secure and reliable energy supply was a key contributor to job losses.