South Africa: Opposition calls for debate on Eskom financial crisis

FILE PHOTO: Workers are seen near cooling towers of the Hendrina power station, located south of Middelburg, South Africa, July 13, 2018. REUTERS/Siphiwe Sibeko/File Photo
FILE PHOTO: Workers are seen near cooling towers of the Hendrina power station, located south of Middelburg, South Africa, July 13, 2018. REUTERS/Siphiwe Sibeko/File Photo

South Africa’s opposition party, the Democratic Alliance (DA), on Sunday called for a debate on the financial crisis at electricity giant Eskom, after the new Parliament is sworn in.

Parliament “has an obligation to ensure that it works to resolve the challenges that have kept Eskom in the red and threatened to send the country on a financial ruin,” said Natasha Mazzone, DA Shadow Minister of Public Enterprises.

South Africa’s new Parliament, the 6th since the end of apartheid in 1994, will be sworn in on May 22 following the May 8 general elections.

The DA will write to the new Speaker, to be elected by Members of Parliament (MPs), requesting a debate of national importance on the unfolding financial crisis at Eskom, Mazzone said.

This follows media reports that contractors working at Eskom’s Kusile Power Station have submitted claims totaling 36 billion rand (about 2.5 billion U.S. dollars) to the financially crippled Eskom.

South African taxpayers, already burdened with rising electricity costs and a flatlining economy, cannot be expected to keep pouring billions of rands into the Eskom black hole, even as evidence continues to mount on the entity’s terminal decline, Mazzone said.

The state-run parastatal provides about 95 percent of the electricity consumed in South Africa, but alleged corruption and poor management have brought the utility to the brink of bankruptcy, resulting in constant rolling blackouts that severely impede economic development.

The government has to fork out billions of rand every year to cash-strapped Eskom so as to keep the lights on.

Eskom is facing debts amounting to 420 billion rand (about 29 billion U.S. dollars). The state-run parastatal has urgently appealed to the government to help it repay the debt so as to prevent it from bankruptcy.

The DA claims that what has happened at Eskom is testament to the depth of the national governance crisis.

“The DA is urging our law enforcement agencies to ensure that all those who are implicated in the industrial scale corruption that took place at Eskom, and elsewhere in government, are given an opportunity to have their day in court,” Mazzone said.

Amid growing calls to privatize Eskom, President Cyril Ramaphosa said last week that the utility is “too big to fail.”

Delivering his first major post-election address at an investment conference hosted by the Goldman Sachs Group in Johannesburg, Ramaphosa said his government is not going to privatize Eskom but will restructure the entity in a process that will allow the private sector to be partners in electricity generation and distribution.