Issued by: The Ministry for Public Enterprises
STATEMENT BY MS S N SIGCAU, MP, MINISTER FOR PUBLIC ENTERPRISES IN RESPECT OF THE ESKOM AMENDMENT BILL
11 June 1998
The Minister has noted the concerns expressed by the National Union of Mineworkers in their submission on the Eskom Amendment Bill.
It is essential that Eskom align itself with the Government's newly adopted Protocol on Corporate Governance in the Public Sector whose purpose is to provide an appropriate framework which will achieve a proper balance between freedom to manage, accountability and the legitimate interests of the different stakeholders. It is in this context and against thais background that the present Amendment Bill allows Government to be better able to use its empowerment initiatives to the benefit of the historically disadvantaged.
The payment of tax and dividends which will be required of Eskom after corporatisation is consistent with normal practice in corporatised entities. The payment of tax and dividends by Eskom will not necessarily result in an increase in tariffs for the following reasons:
Corporatisation must not be mistaken for privatisation, notwithstanding the request by NUM. Government could not envisage the fifth largest electricity generator in the world being incorporated as a Section 21 Closed Corporation.
Moreover, it should be emphasized that corporatisation is where the assets and liabilities are owned and borne by the Company, with the Company making the profits or incurring the losses. However the Government indirectly retains control of the company by virtue of its share ownership.