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Zuma administration has presented four different accounts of R20 billion Eskom funding plan in the space of a week
Backtracking and contradictions need to end, and public consultation and due parliamentary process needs to begin
DA to appeal Speaker's decision to reject call for urgent debate on the matter





Comments made in Parliament yesterday by Minister of Energy, Dipuo Peters, regarding government's proposed R20 billion cash injection into state energy provider Eskom, have exposed the extent of chaos in the executive at present. Indeed, Ms. Peters' comments constitute the fourth different account of what this R20 billion figure entails.

Ms. Peters told the House yesterday:

"It is not additional funding... but it is a R20 billion guarantee from government to allow us, Eskom, to raise loans from the market."

In other words, the Minister of Energy believes the R20 billion is a loan guarantee.

Conversely, Minister of Finance Pravin Gordhan has indicated that the R20 billion is a proposed equity injection, that has not been agreed to by the cabinet, and has not been incorporated into any budgets. He is quoted in yesterday's Business Day, responding to the proposal, as follows:

"[T]he process of budget allocations takes place in the first instance in the minister's committee on the budget, which meets shortly, and then, through the minister's committee on the budget, recommendations are taken to Cabinet."

After Ms. Peters had finished speaking in the House, a Treasury spokesperson was understandably quoted by the South African Press Association, saying he was "not sure" what Peters was talking about.

However, the Treasury's account also differs from the two initial statements presented by the Zuma administration.

Their initial statement indicated that the R20 billion would take the form of an equity injection funded by the sale of state assets:

"The equity injection will be funded from liquidating state holdings in non-strategic and non-core assets."

Shortly thereafter, a ‘corrected' statement was issued by GCIS:

"The R20 billion equity injection to Eskom will be funded through the Minister's Committee on the Budget as part of the budgeting process."

Even this account differs from the Treasury's present line, because it implicitly suggests the funding has already been agreed to. In fact, the Treasury now says no decision has been made at all on it.

In short, then, this administration has, in the space of a week, presented us with four different accounts of where this money is coming from.

There appears to be complete chaos - a full-blown meltdown in both the administration's ability to communicate their plans to the public, and with the internal coherence of their policymaking.

What is particularly staggering is that Minister Peters co-authored the memorandum presented to cabinet about the funding increase. Her comments in Parliament yesterday can be attributable to one of two scenarios, both of which are equally concerning. Either the minister does not have a sufficient grasp of the facts contained in the memorandum she signed, or she sought to be intentionally disingenuous about the nature of Eskom's additional funding.

Furthermore, that cabinet would announce a decision with such significance for the fiscus seemingly without a clear financial plan, and without apparently even consulting the Minister of Finance, indicates a reckless approach to public expenditure. Either the President thought that this grave oversight would go unnoticed, or was not concerned with its implications.

Lost amidst all of this is one final fact: while the executive branch has trotted out four different, contradictory accounts of its funding plan, the legislative branch remains out in the cold. Parliament, the institution that is supposed to house the representatives of the people of South Africa, knows nothing of the nature of this new funding and what the exact opportunity cost of this intervention will be to the ability of the government to deliver services to the poor. If President Zuma is as committed to accountability as he purports to be, he should have ensured that an announcement of this financial significance was preceded by public consultation and a comprehensive assessment of how R20 billion of additional funds would be financed, given that the fiscal framework has now been set.

In response to this display of executive disarray, the DA will today be writing to the Speaker to appeal yesterday's decision not to grant Parliament an opportunity to call an urgent debate on this matter.