Hon Deputy Speaker, hon Deputy President, hon Ministers and Deputy Ministers, hon Members, fellow South Africans, ladies and gentlemen, the ANC supports the Special Appropriation Bill B10 2019 Reprint hereafter referred to as the Bill.
The Bill was tabled in Parliament by the Minister of Finance on 23 July 2019. The Bill is aimed at assisting Eskom with its illiquidity problems especially towards its obligations to repay debt and interest. The Bill proposes an additional R26 billon at the current
financial year and R33 billion in the 2020/21 financial year.
Let me say upfront that the Bill is in compliance with the Money Bills Amendments Procedure and Related Matters Act of 2009 as amended hereafter referred to as the Money Bills Act. Central to the Money Bills Act is the requirement for public participation in drafting this very important law, in line with the wishes of the people who gathered in Kliptown in 1955 and declared for the whole world to know that:" The people shall govern". Indeed our people through their organised formations and individual participation made their voices heard as reflected in the report that was table in this House.
As the standing committee on appropriations, we would like to thank them for taking interest on matters that affect their lives. We would like to encourage more to do so in the future to keep our participatory democracy alive.
Hon members, the President of the Republic of South Africa, His Excellency Cyril Ramaphosa, in his paper to
the nation yesterday aptly capture the importance of Eskom when he argued that, I quote:
"The cost to our economy of power outages is significant; it contributes to investor unease at a time when we are trying to attract more domestic and foreign capital to South Africa and to improve our global rankings on ease of doing business"
Eskom is not just too big to fail, it also too important to fail. Eskom provides over 90% of electricity consumed in our country. It is thus for all intense and purposes a natural monopoly. If it fails, we have no alternative. Also, the socio economic importance of electricity utility cannot be over emphasised, it has played an important role in dealing with these apartheid legacy where more than 60%of our people did not have access to electricity.
This basic necessity of life was made a privilege of the chosen few who unfortunately were chosen on the basis of their skin colour. The majority of members in this House can attest to that reality of being born and raised in a
situation of permanent load shedding. Majority of people in this House come from families where their parents or they themselves had to study through a candle light where some see a candle as a sign of romance, the majority of us see it as a sign of deprivation.
Thanks to Nelson Mandela's ANC that today through Eskom, over 84%of South Africans have access to electricity compared to 36% in 1994. Reliable supply of electricity is important for economic growth. It has been said by many economists, business people, workers and politicians that there cannot be any meaningful economic growth without secure and reliable supply of electricity. The stuttering economy and high levels of unemployment cannot be solved without solving electricity problems of our country. The greasing effect of electricity is thus beyond dispute.
I'm happy that we agree in the committee as the adopted report proves that recapitalization of Eskom should happen, therefore supporting the Bill. It is also agreed that Eskom cannot be allowed to default; this will result in cross defaults which may prompt the lenders of capital
to recall their money. This will include the money guaranteed by government needless to say, that situation cannot be allowed because of its dark consequences on the sovereign debt and sustainability of fiscas.
Although this creates the moral hazard and time inconsistency problem for Eskom to know that government will always come to its rescue, we feel the Bill should be supported. This cannot be a blank cheque.
We agree fully with the financial fiscal commission that this should go with stringed conditions. More about this will be said later by my comrades. However, what we are stressing is that financial support is one of the main interventions necessary to take Eskom to viability and sustainability. We are also arguing that financial assistance from government is not and should not be seen as a panacea of Eskom's wounds. Related to this assistance is the undertaking that Eskom on its own goes to the capital markets and raises a further R46 billion.
While we agree that many of the problems that Eskom is facing today could have been avoided, the fact of the
matter is that Eskom infrastructure is old averaging 37 years. This should raise a red flag for other infrastructure like water infrastructure where you are told that some of the pipes are facing similar problems. Pressure of the infrastructure of our country is huge. We therefore welcome the budget of R864,9 billion over the Medium Term Framework, MTF. We would also like to add that expansion of infrastructure should be accompanied by maintenance budget.
We would also like to congratulate Minister Gwede Mantashe and Cabinet for unveiling the Integrated Resource Plan, IRP 2019 in particular his assertion that I quote:
"Coal will continue to play a significant role in electricity generation as the country has resource in abundance "
Hon Minister Mantashe, the financial markets responded positively to release of IRP 2019. This should be done with due consideration of internationally accepted minimum emission standards over time.
The committee also agrees with Cosatu that the Minister of Public Enterprises should move with lightning speed to strengthen the board of directors and stabilise management. This, you will do by adding necessary skills on to the board and appointing the Chief Executive Officer, CEO, and other executives. Management science is crystal clear that for organisations in transition and facing the challenges, stability is a prerequisite.
Investors and all stakeholders remain doubtful about the sustainability of a company if no such stability is obtained. If Eskom fails contractors and other suppliers of goods and services to Eskom fail, management will also feel the heat, workers also lose; this then beholds some all of us to play our part. We have learned with utter dismay and disbelief that there are coal suppliers whom for whatever reason are making super profits at Eskom.
We are reliably told that some these companies are making profits of up to 50%, 70% and up to 100% while there may be binding agreements, we urge the oard and the Minister to renegotiate these contract and report back to Parliament.
It will be difficult to justify subsidisation of super profits through this Special Appropriations to the people of South Africa. Government is leading the way and we therefore expect everyone who cares about Eskom and the economy of this country to play his/her part.
It's only when we have unity of purpose that the future of Eskom can be guaranteed. The committee received submission from Alternative Information Development Centre, AIDC, who proposed that Eskom should look for other different creative ways of funding.
The over reliance on government is unsustainable, they argued. This is in line with the debate in this House about the need of government to look at prescribed assets as another source of funding. Obviously, this should be done with utmost care with necessary cheques and balances. For Eskom and perhaps for other SOC's worker representations to the board must be considered. This will also help with dealing the trust deficit between the board and management on one hand and labour on the other.
Ultimately, we called on all people to pay for the usage of electricity to ensure that we have electricity for the following day. We urge community leaders to engage and ensure that this problem is equitably solved. We can no longer justify the non payment of services, we owe that to posterity. At the same time, it is important that municipalities also perfect their billing systems. The paper on the new look of Eskom will assist in understanding its future.
The Minister of Public Enterprises assured the committee that the President will soon be unveiling it. We are delighted that the President has undertaken to release the special paper on Eskom, a blue print of turning Eskom around soon. With such interventions, we have no doubt that we will be on a sustainable path to Eskom recovery. The ANC supports this Special Appropriation Bill. Thank you.
Thank you Deputy Speaker, it is not easy being the tallest member of this House. We just heard from the ANC that when the bailout money runs out;
prescribed assets are coming in. That was just confirmed to us and that should give us all possible thoughts.
What is more important is that Eskom has a gun to the head of this government as we have just heard because they are ready to pull the trigger on a sovereign debt crisis at any time if National Treasury does not do their bidding. This is a fact.
Every citizen in our country is a hostage to Eskom. We are hostage to load shedding which causes massive economic damage. We are hostage to these bailout demands and to the endless management crisis. Eskom is not even capable of holding on to its chief operating officer, CEO. We now have a point where the board chairs the Acting CEO. We got an entity riddled with corporate governance problems; whose board's chairperson is meant to hold its corporate governance to account, but is actually in charge of it. That is not how you manage an entity this big.
There are days when I ask myself if Eskom is physically burning money and not diesel to keep the lights on.
Losses at Eskom have accelerated from R2,3 billion last year to R21 billion this year, while at the same time, Eskom's outstanding municipal debt from municipalities has accelerated from R2,3 billion to R20 billion.
Most of the debts from municipalities emanates from the Free State - the gangster state of Ace Magashule. It is interesting to note that the parliamentary programme had originally planned to pass this particular Bill with the adjustment budget in December but our hostage takers at Eskom demanded their money at the end of this month. This means that there were many joint meetings with the NCOP committee on this Bill and it was fast- tracked to today; and in this context, one wonders if load shedding was not as a result of hostage takers ensuring that they get their money on time. [Applause.]
In this present form; this one-page Bill will hand R59 billion in ransom money to Eskom over the next two years. In addition to R23 billion a year already allocated to Eskom over the next 10 years; blowing up the deficit and debt in this constrained fiscal environment. I call it ransom because it is unconditional.
The Bill allows the Finance Minister to transfer the money to Eskom without any preconditions being met. He can impose his conditions after giving them the money. If I gave you a loan for a house and you spend it on the car, no bank would allow that, but National Treasury does.
The DA offered several amendments to this Bill, including saying that no executives at Eskom should get bonuses. People are tired of seeing their schools, hospitals and clinics scramble while state-owned enterprises, SOEs, consume resources meant for the poor and reward their management with bonuses.
Another DA amendment that was rejected was that Eskom review all its procurement contracts to eliminate cost inflation as a result of dodgy deals under the ANC administration, I may say. Eskom coal price contracts show that some companies charge double what others do for coal. The cost inflation is estimated to be R10 billion a year. You begin to see how these Eskom losses stark up.
The amendments that the DA proposed were rejected because they are supposedly contained in Eskom's nine-point plan, but Eskom has had so many turnaround plans that they are back to where they started. Simply put, instead of using the full might of the law in this Bill to force the management of Eskom to do the right thing, this Parliament wants to trust the same people who lost R21 billion last year and cannot keep the lights on to adhere to yet another turnaround plan.
The management of Eskom is so poor that at the start of this month, 1 October, Fitch downgraded Eskom's stand- alone credit rating to junk. The Bill in its present form is a blank cheque and more of the same. It rewards the culture of state capture and theft. It diminishes the importance of oversight and accountability for public money. It allows Eskom to continue to hold the gun to the heads of our citizens, businesses and our government.
The only way out of this mess is to follow the very sensible proposals that the National Treasury's Economic Strategy Document proposes as well as diversifying a generation capacity away from coal and finally
privatising generation capacity. Without this, we will be bailing out Eskom for another 100 years, and I don't think the South African public deserves this as all of its resources that should be used on the poor are drained on Eskom. Thank you. [Applause.]
Thank you very much, Deputy Speaker, the Minister of Finance is tabling a special appropriation Bill, which is basically a request to withdraw R59 billion from the National Revenue Fund, NRF, with the intention of giving that money to Eskom on the illusionary hope that such is going to save Eskom from the current financial crisis.
In 2015, the then Minister of Finance, Nhlanhla Nene, tabled the same Bill, which was asking for R23 billion and also asked for the conversion of a R60 billion loan into equity, which was the previous intervention of the state into Eskom.
All of these are made with the intention that it will lead to the stabilisation of Eskom. Since the R23 billion request, there were lots of conditionalities and
commitments made here that that will be the last time we make an intervention at Eskom. But where are we now? Eskom is still in a debt of more than R400 billion.
In the current financial year, it made losses of more than R20 billion. Now, we are being asked to agree on the withdrawal of R59 billion from the NRF to again give it to Eskom. But there are far much deeper crises at Eskom, which the political leadership is ignoring: firstly, is that there is a leadership crisis. We have a chairperson of a board who is incompetent and has been appointed as an Acting CEO; and secondly, there is no stability with regards to the leadership at Eskom.
The bigger crisis that Eskom is facing is the stabilisation of coal prices. The National Energy Regulator of SA, Nersa, said that the coal prices must cost about R350,00 per ton, but currently, Glencore is supplying coal to Eskom at more than R600,00 per ton. And that is the case with the established coal suppliers. Eskom will never gain stability unless coal prices of the supply has been stabilised.
The other factor which is being ignored deliberately by the politicians is the power purchase agreements that Eskom spends more than 25% on primary costs on Independent Power Producers, IPPs, but the IPPs only generate about five percent of the energy that is needed. There is no sense with regard to retention of the power purchase agreements in the manner in which they are designed currently.
Let us now talk to what should happen; if we were to agree to a special appropriation Bill: firstly, we must fire Jabu Mabuza as the chairperson and Acting CEO and supplier ... [Applause.] ... of Eskom - he is service provider at Eskom - He is incompetent. There will never be changes that will happen under the stewardship of Jabu Mabuza; secondly, we must stabilise the prices of coal to the Nersa's acceptable and given levels; and lastly, we should fundamentally review power purchase agreements with the IPPs.
The new leadership of Eskom should have the autonomy to independently negotiate the power purchase agreements without the imposition from the Department of Mineral
Resources and Energy or whoever is doing so because in many instances the leadership of Eskom is not aware as to who has signed those power purchase agreements. That is what should happen in the immediate.
The other thing that must be looked into is not to unbundle a crisis-ridden Eskom. It cannot be said that there is a crisis that is defining the power utility and break it down into three entities; that is just going to deepen the crisis.
The other thing that must be done is that the state should establish an independent renewable energy division so that we do not fully depend on the private power producers to generate renewable energy. As a long-term or medium-term intervention, you should pursue nuclear energy but in a physically neutral way. You can have a build operate transfer model that can have those that have money build, operate and transfer later on to the state with regards to how it should be.
The other issue that must be dealt with is that you should assemble a highly skilled team to investigate the
delays on the completion of Kusile and Medupi Power Stations because there is a lot of money that has already been lost there. There is no clarity as when are we going to plug Medupi and Kusile into the national grip. So, we might then need to deal with that in the immediate. Unless all these things have been dealt with adequately, the EFF will not agree to the continuous withdrawal of money from the NRF to just throw into a bottomless pit called Eskom. Thank you very much. [Applause.]
Deputy Speaker, year after year, and of late, merely months pass us by before we rise to this podium to essentially sign off yet another Special Appropriation to yet another one of government's crumbling state-owned entities, SOEs. Where do we begin to draw the line when it comes to redirecting billions of rands which can be better used improving the lives of millions of our people who are subject to dire poverty?
When do we say to Board Members of all SOEs that clearly they have failed to root out mismanagement, corruption, maladministration and that they have dismally failed to ensure that things are turning around? Do we have to be
constantly held at ransom by our own SOEs who have become too big to fail? Do we really need to suffer the consequences when markets tremble, our currency falls, investors write ever longer reports and rating agencies threatens us with credit downgrades before any real action and real political will kicks in to do what is right for all South Africans?
Hon Deputy Speaker, we are fast becoming an economy which works on bailout simply to stimulate growth and clearly, in this pace, another R59 billion to keep the lights on. It's a billion here, a couple of millions there, another few billions over there. To many, watching this House at home, it certainly does not seem like we are short of cash, when some ask and get, and others ask but are told there is no more money.
Many hear the unquestionable no, there is not enough money. The ones who get to hear this more often are critical institutions and are the people doing the best they can with the bare minimum. Our NGOs, schools, hospitals, water infrastructure and the basics we require
in rural and urban nodes in our country have to suffer and wait to apply for funding.
Yet, it seems Eskom flips the switch and we are in a frenzy load shedding, rolling blackouts and havoc. Yes, we know that Eskom's success is directly linked to our economy's recovery, and yes, we are well aware of the challenges, but the IFP has time and time again warned that Eskom and many other SOEs face nonfinancial problems.
Therefore, problems are rooted in mismanagement, theft and rooted in ensuring that the state-owned entities continue to receive bailouts which will never satisfy their colossal appetite. Hon Deputy Speaker, it is in the best interest of all South Africans to keep our lights on and saving our economy from collapse. It is for this reason that the IFP supports this appropriation, because we are doomed if we do and we are doomed if we don't. Thank you very much. [Applause.]
Hon Deputy Speaker, the question before us is not if the failure of Eskom ... [Interjections.]
Hon members, your levels of noise are too high, please. Please keep your voices low. Hon members, your noise levels are unacceptably high. Go ahead hon member.
Deputy Speaker, the question before us is not if the failure of Eskom will be detrimental to our economy, we all know that. We all know that for us to excel and for this economy to grow, we need a stable power utility. But the question is: Will R59 billion of taxpayer's money prevents the collapse of Eskom? Will it prevent further load shedding?
The previous R83 billion since 2006 paid to Eskom in the form of bailouts did not. Why would this differ? Yes, the R59 billion now comes with conditions, but the R83 billion also did. The R83 billion was supposed to be used by Eskom only for the enhancement of electricity generation and capacity and security of supply, and not for operational expenses. What was it used for? It was used for operational expenses.
So, what will be different now? The last time that our utility paid dividends to government was in 2006, a mere R1,6 billion. Eskom has already failed hon Buthelezi. Who is responsible for the demise of Eskom? It's not the past. It's the ANC and the cadre deployment committee who appointed board members and executives to Eskom who allowed the utility to be looted, to be exploited whilst neglecting maintenance and good management, and whilst paying exuberant salaries to the executives.
It's the ANC government who allow this to happen. This bailout and the further exploitation of taxpayers will not solve the problems. The ANC government is not serious about solving the problems as they proved today, because members of the inter-ministerial committee whose task is to solve the issue regarding outstanding debt of municipalities to Eskom, did not even show up to the meeting of the Standing Committee on Public Accounts, SCOPA. Where were they? They are not serious.
It is now two years later, and nothing has been done. Now, we must give another billion of rands of taxpayer's money to Eskom. This will not solve the problems. Hon
members, the solution is to stop having yourselves kept ransom by your alliance partners. Ministers and even the President have stood at this podium and announced solutions.
But then they go back and Congress of South African Trade Unions, Cosatu, and the SA Communist Party, SACP, tell them that they are not allowed to do that and now there is another Special Appropriation Bill. We need privatisation, we need unbundling of Eskom, but your alliance partners are preventing you from doing it.
So, hon Buthelezi, yes, you agree with Cosatu, but you agree with them because you have no other choice. You are being kept ransom and you are keeping the people of South Africa ransom. We need deregulation of electricity supply in South Africa. We need to deregulate and create competition for power utility so that private firms can also produce electricity and put it into the grid so that they there is competitive electricity supply in South Africa.
It is unacceptable that we are keeping and doing the same thing over and over again with no different solution. That is the definition of insanity. We do not support this Appropriation Bill. [Time expired.] [Applause.]
Deputy Speaker, I rise to represent the ACDP in this debate with a sense of outrage at the situation at Eskom. Fifteen years ago, Eskom was one of the best power utilities in the world. It had a better credit rating than the sovereign rating. It had reserves of between R20 and R40 billion. It is therefore deeply disturbing that it suffered an unprecedented loss of R21 billion this past year.
Also, it has to borrow increasing amounts merely to service R450 billion debts. It is financially bankrupt. How they indebted end up in this situation? The ACDP was an active participant in the Eskom oversight inquiry in the Fifth Parliament, where rampant fraud, corruption and state capture were uncovered, largely facilitated by the Zuma administration. Further evidence of this is been heard before the Zondo Commission.
Sadly, very little action has been taken against the criminals involved. Instead, those brave members, including the ANC members, who exposed the corruption, the Inquiry Chairperson, hon Dorothy Rantho, and others whose lives were threatened during that inquiry have been sidelined and were not re-elected to this Parliament. Those implicated, many of them were re-elected and occupy many seats in this very House.
The pushback against those trying to fight state capture and corruption continues unabated. This is the reason of my outrage, and the question is: How can we justify this additional expense? Where is the political accountability? Why does no one stand up from the Majority Party and say that you accept the responsibility for the state of affairs?
Also, we know other reasons why Eskom finds itself in this crisis, are the cost overruns at Medupi and Kusile, the bloated and expensive workforce, the coal procurement strategy, and of course, the failure to collect debt that is due to Eskom. Where is the political will to collect that debt? Eskom's financial predicament is entirely of
its own doing, aided and abetted by ANC-politically linked Ministers who ensured that complaint boards were put in place to serve the interests of a corrupt few, and in particular, the Guptas.
Now, the taxpayer is asked to fork out tens of billions of rands with the spectre of load shedding and a sovereign credit downgrade looming. How can this be justifiable? No wonder there is outrage amongst the members of the public. Deputy Speaker, the ACDP proposes that a special ad hoc committee must be set up to exercise oversight over Eskom.
Public Enterprises does its best, but we cannot look to Transnet, Denel, SA Airways, SAA, whereas Eskom of itself needs an ad hoc committee to ensure that the conditions for this bailout are complied with. I thank you.
IsiXhosa:
Sekela Somlomo ohloniphekileyo, ndifuna bacacelwe abantu basemakhaya ukuba i-UDM ayibuxhasi obu buvuvu kwaye bangacingi ukuba sifuna
umbane wabo ucinywe. Kaloku, thina bantu baseMzantsi Afrika...
English:
... we feel that the governance weaknesses or challenges at Eskom have not been addressed. There is nothing clear despite what the government has been saying and the assurances that we have been given. It is our considered view that there is no clear turnaround strategy for Eskom to try and turnaround the institution.
Another important issue which was cited earlier is reducing the cost of Independent Power Producers, IPPs in particular, because we want to cite one and important statistic as a way of substantiating this line of argument for an example, in 2015 that cost was R9,5 billion, in 2016 R15,1 billion, in 2017
R19,5 billion and 2018 it is R25 billion that goes to IPPs. This naturally increases the overall cost or the average cost of generating electricity, at the time when we should be making cheap so that we can be able to stimulate economic growth. This matter seems like there is no intention on the part of government to even cap or
try to ensure that the prices that IPPs charge Eskom for electricity are manageable.
The other important issue is what was indeed cited earlier, the National Energy Regulator of South Africa, Nersa, regulations talk about R350 per ton for coal, but Eskom has paid in excess of that. When were doing oversight last as a Standing Committee on Appropriations on this issue, I think they also cited the fact that either a supplier or supplier were overpaid to the tune of R4 billion, which is money that they need to recover. How do you overpay someone to the tune of R4 billion?
Look at the Auditor-General's report on Eskom. It talks about procurement and financial irregularities nonstop and yet we are saying we should be throwing money at the problem instead of addressing the underlying root causes of the challenge. Unbundling, whether you like it or not, comes out of the manuals of the International Monetary Fund, IMF, and World Bank on privatisation, unless and until government is able to produce a concept document that can outline what it means by unbundling. It is clear that the fears of trade unions in particular and some
amongst us in South Africa that this is a precursor to privatisation are not unfounded.
The other very important issue that we to highlight is this: Why is Eskom not allowed to play in the renewable energy space? Who is benefiting out of that, why are we creating monopolies in those sectors? Who works at these wind farms, because they employ three, four or five people and yet we spend R25 billion per annum instead of spending money in areas where they will ensure socioeconomic development benefits for the country. Amasela, (thieves).
Our Deputy President, Deputy Speaker, hon Members of Parliament. Let me start by questioning facts Fact number one is that currently coal is the lifeblood of the South African economy. It is the predominant fuel source for electricity accounting for about 90% of South Africa's primary energy needs. Without coal-derived electricity, industries such as manufacturing, financial services, and social services would be severely crippled, resulting in massive job losses. We therefore need coal
as things stand right now, while we diversify our energy mix into the future.
In addition to the extensive use of coal in the domestic economy, about 28% of South Africa's production is exported, mainly through the Richards Bay Coal Terminal, RBCT, making South Africa the fourth largest coal exporting country in the world. In 2018, total coal sales were R146 billion, up from R130 billion in 2017.
Fact number two is that coal mining is the third largest employer in the mining sector. The coal industry employed 86 647 people in 2018 up from 82 248 in 2017, representing about 19% of total employment in the mining sector. However, despite these hard facts, we do acknowledge that the calls to decrease the world's dependence on coal as an energy source are well intentioned. Lower use would reduce greenhouse gas emissions, and less demand would lower the environmental risk of coal mining. As such, as the world moves away from coal, South Africa will need to consider the implications. For example, full dependence on renewable energy can only be done if we move to lifestyles and
systems that require only a small fraction of the present rich world per capita energy consumption. If all South Africans, including the majority of who are in the rural areas, were to be brought to the required living standards, the renewable energy would not be able to cater for all of us. This is fact number three.
So we need to strike a balance between all these factors. That is why we bought into, and supported the idea of Just Transition, which is the idea that justice and equity must form an integral part of the transition towards a low carbon world. At its core is the view that it is possible and necessary to promote, through the mobilisation and collaboration of workers and communities, public policies that simultaneously address environmental challenges and secure decent jobs and livelihoods for affected workers.
It is thus no brainer that the trade union movement throughout the world is in support of and advocates for this Just Transition. As the country, South Africa is in support of this. This is evident from the consultative forums, including National Economic Development and
Labour Council, Nedlac that our government has with unions when dealing with issues that affect workers such as Just Transition. I also want to applaud our own Portfolio Committee on Employment and Labour for adopting a consultative programme of action which makes labour unions important stakeholders thereof in this sixth Parliament.
We also support the view of the National Union of Mineworkers, NUM, that government should support Eskom with funding, as one of its entities to achieve its developmental goals. That is why we support this Special Appropriation Bill. However, we want to make a clarion call to all who owe Eskom, especially the organs of state, to please do their patriotic duty and pay their Eskom debts. The Government bailouts are not, and will never be, sustainable. If the residents of Polokwane Local Municipality, where I come from, the majority of whom are poor, could pay their electricity bills, what stops the rest of us to do the same?
Sepedi:
E reng ke bolele nnete. Meyara wa rena wa Polokwane o lemogile gore Maafrika ba ipshina kudu ge ba ?omi?a didiri?wa t?a bona ba sa di kolote. Ba na le dillamathekeng, gomme ba di rekela dinakomoyeng. Ba a tseba gore dillamathekeng di ?omi?a mohlagase. Ba na le diDSTV. Ba a tseba gore diDSTV di ?omi?a mohlagase. Eskom ke hlatse ya gore ba lefela mohlagase wa bona.
Batho ba Afrika-Borwa ka moka, a re se phaleng ke batho ba Polokwane. A re ba eki?eng re patele mohlagase.
English:
Hon members would have witnessed the announcement of the Integrated Resource Plan, IRP, by the Minister of Mineral Resources and Energy last week. This is important to know because it means that the IRP is by no means the long term solution to South Africa's energy crisis. As the government puts it, it is a plan that directs the expansion of the electricity supply over the given period and it augurs well with the Just Transition Principle.
Of significance about the IRP is that not only will it be in line with the commitments South Africa made, at the
climate change conference held in Paris in 2015, to reduce coal emissions, but it will also eliminate the element of risk when unwarranted issues surface at power stations. I am sure everybody will not want to experience load shedding anymore. I know that the prophets of doom are already shutting down this IRP, saying that it is not enough. But in my language we say: "T?ie e phala morogo". [Half a loaf is better than none.] We therefore, as the ANC support this Special Appropriation Bill. Thank you. [Applause.]
Honourable Deputy Speaker, if Eskom was a private sector company it would have long ceased to exist. But state-owned companies in a developmental state such as ours do not primarily exist to make a profit. They exist to provide a service, while also contributing to the provision of jobs and the development of infrastructure. It is a delicate balance when such a company is mismanaged, or plundered, instead of contributing to its development; it drains the state of resources. In Eskom's case, it is driving South Africa to the brink of bankruptcy.
Energy stability is undeniably important. It keeps the country, its economy and its people going, and creates an environment conducive to investment. But government cannot simply default to bailouts. Money does not grow on trees. We do not have R59 billion lying around in a bottomless cash pit. On the contrary, money is desperately needed to cushion poverty, narrow inequality and create jobs. We should be very wary of using the National Revenue Fund to apply plasters to wounds requiring major surgery. Now more than ever, we need to stop talking about restructuring Eskom and actually do it. We will not do Eskom or South Africa any favours if we fail to deal decisively with the root causes of the utility's weaknesses.
Good policy should be considered within Eskom's restructuring plans which allows for cities to procure and generate their own power, which will create competition that will lead to innovation and more job creation. These are the types of good and sustainable responses that South Africans need to hear. Hon Deputy Speaker, it would be insanity to use the R59 billion to paper over the cracks and allow Eskom to carry on as
usual while mismanaging its way to another bailout without conditions.
The Good Party therefore welcomes the strict reporting requirements attached to the bailout. This includes regular liquidity reports; monthly management reports; reports on actions taken to recover electricity debts; reports on initiatives taken to reduce primary energy cost and fruitless and wasteful expenditure. Besides anything else, Eskom won't be able to use the money to pay out hefty year-end bonuses to undeserving staff. South Africans will study these reports, and hold government and Eskom to account. I thank you.
Deputy Speaker, first and foremost, the AIC supports the Special Appropriation Bill. We must all be worried. On Wednesday, a number of our children at various schools were affected by load shedding during their Computer Application Technology exam.
The Special Appropriation Bill earmarks the provision of R26 billion and R33 billion for the 2019-20 and 2020-21 financial years, respectively to Eskom, under very
stringent conditions. Part of the conditions requires Eskom to use this money to settle debt and interest payments only.
Another condition is for Eskom to outline a concrete plan of action to recover the money owed for electricity sales. Eskom has been thrown a spanner. It has to act decisively against the defaulting municipalities.
We have also noted with grave concern the legal battle between Eskom and the National Energy Regulator of South Africa, Nersa. This is unprecedented and unusual in the history of the utility company.
While we support the division of Eskom into three compartments, we remain unhopeful about the future of the existing subsidiaries of Eskom - Rotek and Roshcon. Nothing has been said about them in the unbundling of the Eskom debate.
In closing, we call upon the President of the country, His Excellency, Cyril Ramaphosa, to consider the appointment of Bobby Godsell as Eskom CEO. Mr Godsell is
an established businessman who worked for Eskom as its non-executive director. In these trying times, we must narrow our ideological differences to accommodate our converging interests. I thank you.
Deputy Speaker, I agree with Wikipedia that identifies three periods of the energy crisis, and I am referring to the financial years: 2007-08, 2014-15, and 2019. We are indeed in an energy crisis. An example is the area around Kriel in Mpumalanga, which is now the world's second biggest sulphur dioxide emissions hotspot. People are dying of lung- related illnesses.
Eskom has gone to court to recover the R69 billion cash bailout it had received and to have the right to raise a further R40 billion by increasing electricity prices by 16%, in order to solve its liquidity crunch over the next three years. The people who are going to suffer are those poor people in our country.
Eskom is in such a deep crisis that South Africa is staring "down a barrel of a downgrade" as Moody puts it.
Acting CEO, Jabu Mabuza, does not know the electricity generation and distribution business.
There is no end in sight to Eskom's financial, managerial and generation of electricity crisis. In 2019, Eskom's power production dropped to 219 Giga watts. It cannot produce more. Eskom has admitted that more than a third of its infrastructure is broken.
Eskom spent over R50 billion on diesel in 10 years. The utility has only 2 000 megawatts of spare capacity. Eskom is in a deep crisis. Talented specialists who know the business very well must be placed in charge. Government must deal with the leadership issue at Eskom. Meanwhile, government must buy all the electricity it can from the IPPs and allow municipalities to do the same.
The people of our country are suffering and unfortunately, ...
Sesotho:
... ntate President, le a palelwa, morena.
Deputy Speaker, I have just been informed that I am a grandpa. We have six granddaughters and now we have another grandson, so I am going to support this Bill to keep the lights burning. [Applause.]
The solution to the woes of Eskom has ably been offered by the leader of the Sixth Parliament when he spoke about the charter of positive values and called for ethical leadership. The Deputy President has shown his support to strengthen the civil society mechanism, supporting the civil society manifesto.
With regard to Eskom, there is a need for a model of engagement with the civil society mechanism, which seems to elude us. If this was in place, it would have saved the country R59 billion.
Existing oversight mechanisms like the Eskom board, the Ministry, the Cabinet are not enough. The country needs a civil society mechanism to have oversight over Eskom. There is a need for a model of engagement with civil society to assist the board, the Ministry and the Cabinet, so that the people can govern.
One of respected Ministers has alluded to the lack of ideological psych amongst hon Members of Parliament to the values of the liberation movement. The exercise of this ideological psych would have prevented the problems at Eskom.
Is has not gone unnoticed that Eskom did the country proud by connecting many of the most indigent people in the country, but at a cost that has wiped out this remarkable achievement. Eskom can do the country proud to connect all South Africans from 80% to 95%.
We wish the Minister of Public Enterprises the Wisdom of Solomon to put Eskom on the right path and he is well placed to do so. Al Jama-ah supports this Special Appropriation Bill called the Special Appropriation Act of 2019. [Applause.]
Deputy Speaker, let me acknowledge the work of National Treasury, Parliament Budget Office, the Financial Fiscal Commission, all support staff and all institutions who participated in the Special Appropriation Bill for Eskom.
Afrikaans:
Eskom wat krag moet voorsien en as 'n winsgewende staatsentiteit moet funksioneer het hul mandaat en hul visie in die staatskapingtydperk verloor. Die impak is negatief, veral op besighede, veiligheidsdienste, landboudienste, en gesondheidsdienste. Alle staatsdepartemente wat dienste aan gemeenskappe moet verskaf, moet nou ook beurtkragonkostes in hul begroting inwerk.
Die regerende party, die ANC, moet volle verantwoordelikheid neem vir die swak ekonomiese groei, ho werkloosheidsyfer en die onderverhaling van inkomste by die Suid-Afrikaanse Inkomstediens, Sars, en munisipaliteite.
English:
A corrupt ANC has corrupted many state departments. Stop blaming apartheid for the mess of Eskom.
Afrikaans:
Ouditeursverslae bevestig dat Eskom se senior bestuur gedurende die staatskapingtydperk nie die finansiele
riglyne van goeie bestuur en tenderregulasies gevolg het nie. Van die groot insinkings was die afskaffing van onderhoudsprogramme by die kragstasies en die vermindering van ingenieurs.
Eskom se pogings om interne persone verantwoordelik te hou het nog geen resultate gelewer nie.
Die ANC-beheerde munisipaliteite en ANC-beheerde staatsdepartemente, asook die nie-betaal-kultuur van die ANC in sekere gemeenskappe, moet ernstig aangespreek word.
Die DA s dat almal dieselfde behandel moet word. Waarom moet wetsgehoorsame burgers betaal, swaar kry, en krag koop, terwyl daar mense is wat onwettig krag gebruik of net weier om te betaal? Dit is baie belangrik.
English:
The Appropriations Committee, during its oversight visit to Eskom head office last week experienced load shedding, whilst Eskom senior management could not explain.
Some of the root causes are conflict of interest, no- consequence management, no compliance with National Treasury regulations; and defects at the newly built plants.
It is very important to not underestimate the experience of the unions. [Interjections.]
Afrikaans:
Kontrakte en tenders moet ondersoek word.
English:
Hon Minister and Deputy Minister, take responsibility on behalf of the ANC. Your party ... Take responsibility and allow Parliament and all of us to help and fix the mess in Eskom. [Interjections.] I thank you.
Hon Deputy Speaker, hon Deputy President and hon members, hon Sarupen speaks of the DA's rejected inputs. Those inputs were rejected because the DA wanted to expropriate the committee's discussions without compensation, or at least, give credit to the committee!
[Laughter.] The DA summarised the committee's discussions and wanted to pass them off as their own!
In my submission, I will underscore some of these conditions as discussed and agreed to in the committee
My advice to hon Shivambu regarding his concerns about stabilising Eskom's coal costs are as follows: He must please revisit Eskom's 9-point Plan as presented to our committee, as well as the inputs made by hon Minister Gordhan during his Budget Vote debate on 11 July 2019. Please pay undivided attention to paragraph 32 under the Operational Performance section. A great injustice will occur if we approach this debate as if it is the first time we engage on the serious matter of saving Eskom and by extension saving the economy of this country.
It is very difficult to respond to hon Wessels because his input is from a defeated position. The least I can say is that President Nelson Mandela, in 1999, warned us of such politicians during his last state of the nation debate, when he said:
We should all be careful not to turn concern for difficulties into a death wish.
For us not to support this Bill because of the difficulties faced by Eskom is tantamount to an economic death wish.
Eskom is too important to the socioeconomic development of our country. The existence of a positive correlation between electricity availability and economic performance is well documented. The same can be said about a healthy Eskom and the country's economic performance. In fact, Eskom is the backbone of our economy.
The committee agrees with the President's assertion in his 2019 state of the nation address that Eskom is too vital and cannot be allowed to fail. Thus we are in support of this 2019 Special Appropriations Bill.
The committee further commends the good progress made by Minister Gordhan and the board as led by Mr Mabuza in their efforts to stabilise Eskom. In fact, various external interested parties who made written and oral
submissions during the public participation period echo the committee's sentiments.
However, the committee and most external parties agree that there should be stringent conditions attached to this recapitalisation package. Another area of overwhelming agreement is that these conditions must be accompanied by clear consequences should they be ignored.
We also agreed that some of the conditions will find themselves in the Appropriations Bill, others in regulations and others as ministerial conditions.
For the R26 billion to be appropriated in the current financial year, the Minister must put strong ministerial conditions. For the R33 billion for the 2020-21 financial year, some conditions must find themselves in the Appropriations Bill, regulations and ministerial conditions.
This will send a strong message that Parliament and the people of South Africa are serious about their demand for accountability and value for money.
Medupi and Kusile are critical for the country's energy security. However, the budget and time overruns in the build programme suggests high levels of internal control failures, negligence and even corruption, especially corporate capture. By the end of the construction of this project, the budget would have been overshot by over R140 billion.
As these budget overruns persists, the committee was further informed that one contractor has conceded that it was overpaid by R4 billion. I repeat: R4 billion! This is not small change by any measure!
In light of these alarming revelations, the following serious questions must be answered: Who was responsible for this payment? What was the role of the contractor in the said saga? How many other contractors have been overpaid? Does Eskom have adequate checks and balances in place in respect of its finances and governance?
These red lights suggest that a thorough forensic audit of the whole build project must be conducted as a matter of urgency. We therefore call upon the Minister of
Finance to institute a forensic audit and report back to Parliament.
The committee was shocked to discover that Eskom is not serious about its role in the transformation of the economy, especially through implementing the broad-based black economic empowerment policy, BBBEE.
The significant reduction in BBBEE spend - from 74% of target in the financial year that ended in March 2018 to a disheartening 54% against a self-imposed target of 85% for the financial year that ended in March 2019 - is a bad reflection on Eskom's commitment to transforming the economy.
The President again in the 2019 state of the nation address lists economic transformation and job creation as one of the seven key priorities.
The Minister of Finance argues in National Treasury's Economic Transformation, Inclusive Growth, and Competitiveness: Towards an Economic Strategy for South Africa paper, that public procurement can be leveraged
for the support and growth of small, medium and micro enterprises, SMMEs.
One of the ruling party's manifesto commitments is based on the de- concentration and transformation of the economy and opening it up to participation by small and medium enterprises, emerging co-operatives and township and village enterprises.
These are four good reasons for Eskom to pull up their socks in the area of