News / South Africa / Parliament

Makhosandile Zulu
3 minute read
23 Oct 2019
10:45 am

Mboweni says one of the key issues is appointing the ‘correct people’ at Eskom

Makhosandile Zulu

The minister said this during a debate on the Special Appropriation Bill which was adopted by the National Assembly on Tuesday.

Finance Minister Tito Mboweni. Picture: ANA

Finance Minister Tito Mboweni on Tuesday told parliamentarians that one of the key issues that need to be solved at Eskom is appointing “the correct board of directors” and “a competent management team” to run the entity and who would be held accountable for operations at the power utility.

Mboweni was speaking at the end of the debate on the Special Appropriation Bill, which was adopted by the National Assembly during its House sitting on Tuesday afternoon.

The bill will now be referred to the National Council of Provinces.

The bill aims to appropriate additional monies for the requirements of the department of public enterprises to assist Eskom with its financial obligations.

It is envisaged that an amount of R59 billion will be appropriated out of the national revenue fund, with R26 billion for the 2019/2020 financial year and R33 billion for the 2020/2021 financial year.

Mboweni said since assuming office he had learned that the minister of finance was burdened with having to find resources for state-owned enterprises, including Eskom, South African Airways, SA Express, Denel, and Alexkor.

The minister further said his role was also to source funding for “a huge bill for the compensation of employees, many programmes that must be funded amidst an ageing and overburdened infrastructure within the context of declining tax revenues due to low economic growth”.

He said he agreed that Eskom must be funded but questioned where those funds should be sourced from.

“Eskom is a business, its run by people, so one of the key issues that we need to solve is by appointing the correct people to run Eskom, that’s what we need to do. We must appoint the correct board of directors, a competent management team, [people that can be held] accountable for the operations at Eskom,” Mboweni said.

The minister said the problems at the power utility were not just financial but were complex and needed to be approached via “complex theory”.

“The problem at Eskom is not just financial and if we’re going to reduce a complex problem to the lowest common multiplier – being the financial problem – we’re not solving the problem. We need to approach solutions at Eskom via complex theory. Understand the complexity of the institution we’re dealing with to come out with complex solutions,” Mboweni said.

He reiterated his message to parliamentarians that they should mobilise communities to pay for the services rendered by the power utility.

“Go mobilise your people to pay unto Eskom what belongs to Eskom, as law-abiding citizens,” the minister said.

The Special Appropriation Bill was tabled by Mboweni on July 23.

This came about after Eskom experienced challenges in drawing its intended facilities and could not honour its obligations, which could have had negative consequences for the power utility and the fiscus.

Mboweni invoked Section 16 of the Public Finance Management Act (PFMA), which deals with the use of funds in emergency situations and through it the minister approved R17.652 billion for Eskom.

The bill further provides that Mboweni, in writing, may impose conditions to be met by Eskom before any part of the amount is transferred and must impose conditions to be met by Eskom after the transfer of any part of the amount.

Section 16(6) of the PFMA requires that expenditure in terms of section 16 (1) must be included either in the next adjustments budget for the financial year in which the expenditure is authorised or in other appropriation legislation tabled in the National Assembly within 120 days of the minister authorising the expenditure, whichever comes first.

The Adjustment Appropriation Bill, which is to be tabled on October 30, would not have met the deadline and parliament had to introduce the Special Appropriation Bill to allocate the expenditure for Eskom.

(Background reporting, Parliament.)

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