NCOP passes Eskom's Debt Relief Bill
Political parties in the National Council of Provinces voted in favour of Eskom's Debt Relief Bill, pushing it closer to being signed into law by President Cyril Ramaphosa.
The bill was passed on Wednesday morning.
Initially introduced to the National Assembly in February, the bill would see the National Revenue Fund provide R254 billion in debt relief to the utility over the next three financial years.
Finance Minister Enoch Godongwana initially proposed it to resolve Eskom’s unsustainable debt burden and unlocks investment which will help restore fiscal credibility.
Since 2022, the government has been considering measures to relieve some of Eskom’s R423 billion debt, arguing that the embattled utility cannot reasonably service its debt from its internally generated cash flows.
The bill proposes advances to Eskom, covering capital and interest payments over the next three years.
This will amount to R78 billion in 2023/24, R66 billion in 2024/25 and R40 billion in 2025/26 and R40 billion for the 2025/26 financial year.
Chairperson of the Standing Committee on Appropriations, Dikeledi Mahlangu, told the NCOP that they recommended that National Treasury provide a comprehensive plan within 60 days of the bill's adoption.
The committee further recommended that the National Treasury, the Department of Public Enterprises, the Minister of Electricity [Kgosientsho Ramokgopa] and the Department of Cooperative Governance ensure that issues around load shedding are urgently resolved.
"We have also recommended that the National Treasury and the Department of Public Enterprises should ensure that cooperate and fiscal government is improved through reform that enables management and boards of state-owned entities to operational autonomy they require to make profit maximising decisions and eliminate political interference to enhance operational transparency and efficiency," said Mahlangu.
She added: “National Treasury, together with the Department of Public Enterprises, should come up with a clear plan within 60 days of the adoption of this report to ensure that decisive judgment is made for state-owned entities to deliver on return to investment effectively and efficiently, failing which dysfunctional SOE’s should be restructured sold off or shut down to save the taxpayer’s money.”
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