Mboweni warns on Eskom
As he bails out the power utility with R59bn, minister says it needs ‘right people’
FINANCE Minister Tito Mboweni has warned that problems at Eskom were far deeper than throwing money into the power utility.
This came after opposition MPs blasted him for the bailout of R59 billion to Eskom following the approval of the Special Appropriations Bill by the National Assembly yesterday.
Mboweni said issues at Eskom were complex and required tough solutions. He said MPs spoke as if Eskom was not a business.
“Eskom is a business and is run by people. One of the things we must do is to appoint the right people. The problem at Eskom is not just finances,” Mboweni said.
He said if MPs were going to reduce the power utility’s problems to finances, no solutions would be found.
Chairperson of the standing committee on appropriations Sifiso Buthelezi said the R59bn bailout to Eskom was not a blank cheque. He said the situation cannot be allowed to continue.
Eskom was sitting on a debt of R440bn and it requires government bailouts to stay in business.
It told Parliament three weeks ago that it expected to suffer a loss of R21bn next year. The power utility is also facing delays in the completion of the Medupi and Kusile power plants with cost overruns. Eskom said in Parliament that the costs for the two plants had more than doubled since they began construction in 2008.
Jabu Mabuza, the chairperson of Eskom, had said the costs of Medupi had been below R70bn during the construction phase, but have now ballooned to more than R165bn. The same has happened at Kusile, with costs initially at less than R65bn but now sitting at R165bn.
Opposition MPs said the situation at Eskom was untenable and they want the government to stop the bailouts.
Cope deputy leader Willie Madisha said the country was facing a serious energy crisis. He said Eskom was sitting on a huge debt and had also admitted that a third of its infrastructure was broken.
EFF’s Floyd Shivambu said the bailouts have been continuing for many years, but there was no end to the crisis at Eskom. He said the government had injected more than R100bn in the past few years, but Eskom has not yet turned the corner and was sitting with a debt of R440bn.
He called on the government not to unbundle the crisis-ridden Eskom.
Denis Joseph of the DA said the standing committee on appropriations must hold the Eskom board accountable for the bailout given. He said during the oversight visit to Eskom’s Megawatt offices in Sunninghill, north of Joburg, last week they witnesses serious problems at the power utility.
Nqaba Kwankwa of the UDM said the trade unions had every right to be afraid of the unbundling of Eskom. He said this could lead to privatisation.
Mboweni also warned that those who owe Eskom must start paying. Municipalities owe Eskom R25bn.
He said MPs must mobilise their communities and urge them to pay what is due to Eskom.
DEPUTY President David Mabuza has promised to speak to Co-operative Governance and Traditional Affairs (Cogta) Minister Nkosazana Dlamini Zuma for her failure to attend a key meeting in Parliament on municipal debt.
Members of the Standing Committee on Public Accounts (Scopa) were furious yesterday after Cabinet members, who sit on a task team on the municipal debt to Eskom, did not attend the meeting. Municipalities owe Eskom R25billion.
But the inter-ministerial task team did not show up at the Scopa, leaving officials fuming. During the question and answer session to Mabuza in Parliament yesterday, DA chief whip John Steenhuisen wanted to know what action will be taken against Dlamini Zuma who chairs the inter-ministerial task team.
Mabuza said he will raise the issue with her.
“It’s important that members of the executive are mindful of the work of Parliament and be respectful of this House. If there are complaints against the minister, I’ll have a discussion with her.
“Members of Cabinet are not going to deliberately undermine this Parliament.
If there are questions asked, we will make sure they are answered timeously,” Mabuza said.
The committee is chaired by Dlamini Zuma and the other members are Public Enterprises Minister Pravin Gordhan and Finance Minister Tito Mboweni.
Alf Lees of the DA said the municipal debt to Eskom has increased by R9.8 billion in the last two years. The debt was now sitting at R25bn.
Mervyn Dirks of the ANC said the government has undermined Scopa.
“I have the same view as Lees that we should not continue with this discussion because the government will continue to undermine this committee,” Dirks said.
Chairperson of Scopa Mkhuleko Hlengwa said it was unacceptable that ministers had not showed up at the meeting.
“The briefing was by the Inter-Ministerial task team. It consists of the ministers of Energy, Finance, Public Enterprises and Water and Sanitation. Unless there was a reshuffle last night, I don’t see any of these individuals here. The bottom line here is that we have been undermined,” he said.
He also warned the officials of
Cogta not to give explanations on the absence of the minister. This was after the officials said there was no intention on the side of Dlamini Zuma to miss the meeting as she was in Cabinet. Hlengwa said Dlamini Zuma will have to answer for herself.
Hlengwa said Dlamini Zuma had initially said she was going to attend the meeting but then backtracked on her decision. Eskom is sitting on a massive debt.
Eskom board chairperson Jabu Mabuza told Parliament three weeks ago that the municipal debt was a huge burden to the power utility. He said if it could be settled it would bring relief to Eskom. Eskom has said it expected to post a loss of R21bn next year.