South Africa’s state-owned power utility “isn’t on the brink of financial collapse” and the government has the problem “well under control,” public enterprises minister Pravin Gordhan said.
His comments come after documents last week showed the state was forced to pay R5 billion ($353 million) in emergency funds so that Eskom – which is battling with declining revenue, higher costs, and keeping the lights on — could meet obligations.
“We have had an extreme financial difficulty as a result of state capture — the damage that has been caused has been huge,” Gordhan said on Johannesburg-based Talk Radio 702. He was referring to the process in which billions of rand have been looted from government coffers through the use of political connections to secure appointments of allies to key state posts and win contracts. “We understand what changes need to be made.”
The government announced a record R69 billion bailout for Eskom in February to be paid over three years. Of that, R23 billion is pledged for the current financial year. Based on the 2% limit of the appropriated national budget, only R17.7 billion can be transferred. The remaining balance will have to be subjected to the normal appropriation process when parliament is constituted after the May 8 election.
The R23 billion required a special bill that didn’t come up before parliament completed it business before the vote The National Treasury had targeted disbursement between August and October 2019.