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DA: Statement by Athol Trollip, Democratic Alliance Parliamentary leader, on Eskom funding (15/11/2010)

15th November 2010


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I will today be taking a number of steps in response to the recent announcement that the Zuma government plans to make an additional R20 billion cash injection into ailing parastatal Eskom. Firstly, I will be writing to the Speaker, Hon Max Sisulu, to call for an urgent debate to be held in parliament tomorrow to discuss how this additional funding would be utilised and how the government plans to source this financing from the fiscus. Secondly, I will be writing to President Jacob Zuma to request an explanation for the cabinet's sudden change in policy concerning the financing of the R20 billion allocation. Furthermore, I will be asking the President to make public the exact details of how the government plans to source these funds.

The R20 billion of funding is to be made available to Eskom over and above the doubling of its guarantee framework from R176 billion to R350 billion, announced last month.
Eskom is a public company, and public funds are being used to keep it afloat. Careful planning and public consultation must underpin any decision to make further financial assistance available to it. The cabinet's vacillation on the source of the additional funding, illustrated by its virtually on-the-spot policy u-turn, following last week's cabinet meeting, indicates the deep divisions in the executive and the concerning lack of planning that accompanied the announcement of a decision that will have considerable implications for the fiscus. That the cabinet's announcement about the planned funding allocation to Eskom was made without prior public consultation, and seemingly without a detailed financial plan, indicates a blatant disregard for transparency and accountability by the Zuma administration.


According to National Assembly Rule 104, a private member may on any sitting day request the Speaker to allow a matter of urgent public importance to be discussed in parliament.
The Democratic Alliance (DA) regards the cabinet's handling of the additional R20 billion in expenditure on Eskom as a clear attempt by the ANC government to undermine the basic principles on which our democracy is based, and therefore deserving of urgent interrogation by parliament.

Such interrogation is essential if the Zuma administration is to properly account for how it plans to generate this additional financing. The fiscal framework has already been set. Pulling money from the national budget will result in funds being diverted from other priority areas and sourcing funds through borrowing will increase government's debt repayments. Though we absolutely support the need to secure South Africa's future energy supplies, any decision about how these funds will be sourced will need to take into consideration Eskom's history of financial mismanagement.


The President needs to demonstrate that his administration respects that it is answerable to the public, and make a full disclosure of how the government plans to fund the proposed cash injection into Eskom. In turn, in considering the DA's request for an urgent debate, the Speaker needs to demonstrate that attempts by the executive to undermine accountability cannot be tolerated and that a decision of this magnitude must be afforded proper debate in parliament.



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