WATCH | MPs slam Eskom’s debt relief amendment bill seeking to rid interest on loans
Eskom is seeking more relief by looking to amend the Eskom Debt Relief Bill which was implemented at the beginning of the year.
In February the National Treasury said the government would take on R254bn of Eskom's debt over the medium term. It was decided the advance funding would take the form of an interest-free loan from the National Revenue Fund.
However, during the mid-term budget speech in November it was revealed the government would convert the loans from interest-free to interest-bearing.
The power utility is seeking to “amend the Eskom Debt Relief Act, 2023, to provide for the payment of interest by Eskom on amounts advanced as a loan, to provide for a power by the minister of finance to reduce the amounts for the requirements for Eskom in the event of non-compliance”.
Opposition parties have slammed the amendment bill as another bailout for a failing state-owned enterprise.
The DA, EFF, IFP, FF+ and ACDP rejected the amendment, while GOOD, the NFP and the ANC supported it.
The DA's representative said: “Eskom has attracted staggering debt from everywhere it can possibly borrow. Eskom is bankrupt and its ANC sponsor, hiding from the sheriff of the court knocking on the door at Luthuli House, is on the brink of political collapse, having brought South Africa to the brink of financial collapse with it. A new model is needed. We do not support this bill.”
The EFF's representative said: “We reject this Eskom bill. This is a bailout and the political motive is not meant to address the debt. Instead, it is meant to send a positive signal to the market rating agencies. This bill should be called the Eskom bailout bill, not the debt relief bill.”
The IFP representative said: “We find ourselves here again. I could have said the same speech I said a few years ago and the content will still be very much relevant. We are debating the same solutions and allocating more money. Eskom's problems are not financial. They are structural and deeply immersed in corruption, greed and government's failure. Nothing will change as long as the ANC is at the helm of this country.”
An FF+ spokesperson said the failure of Eskom should not be debated lightheartedly. “It is responsible for the decay of our economy. It requires solutions, not amendments and bailouts. This bill does not provide solutions and that's why the FF+ rejects it.”
GOOD, led by Patricia de Lille who served as minister of public works and infrastructure from 2019 to 2023, supported the Eskom Debt Relief Act.
Its secretary-general Brett Heron said: “South Africans have invested heavily to keep the lights on but the lights haven't been kept on. We are in desperate need of new supply, so much so that at one point we declared a state of disaster. GOOD urges that the debt relief in conjunction with the financial injection is used as a means to transform and stabilise our energy generation, transmission and supply. We support the bill.”
Some MPs focused their energy during proceedings on frivolous points of order, which included snitching on an MP for drinking coffee in the house, debating what constitutes “unparliamentary” language, including the word “twak”, and personal jibes against members of political parties.
Last week Cosatu said it supported the bill and was concerned the mid-term budget stated Eskom would pay interest on the loans.
The trade union federation said: “The federation is concerned by a new clause in the bill requiring Eskom to pay interest on the relief provided to it by the state. This is a major departure from the objective of the act, which is to relieve Eskom of its suffocating debt burden, requiring it to pay interest on the debt relief to the state.
“This shift is deeply worrying given that Eskom continues to struggle to provide reliable and affordable electricity and remains in a fragile financial space.”
Eskom has plunged South Africans into darkness through extended periods of load-shedding over the past decade. Since 2019 it has received R181bn in bailouts.
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