Hon Chairperson, hon Deputy Minister of Finance, my principal, tata Masondo, hon members, fellow South Africans, it is my privilege to table before this House a report on the 2019 Special Appropriation Bill on Eskom, on behalf of the Select Committee on Appropriation. The Special Appropriation Bill was tabled by the
Minister of Finance on 23 July 2019 and it was referred to the committee on 22 October 2019.
We note that the Bill was passed by the National Assembly without any specific amendments and thereafter the Bill was referred to the National Council of Provinces for concurrence. In line with section 13(2) of the Money Bills Amendment Procedure and Related Matters Act, read together with section 72 of the Constitution, the committee has a responsibility to hold public hearings on Money Bills and to report thereon to the National Council of Provinces.
To this end, an advertisement was published in national and regional newspapers, inviting the general public and interested parties to commend on the Bill. The committee, together with the Standing Committee on Appropriations, jointly conducted a series of successful stakeholder engagements and public hearings on the Bill, as required by the Money Bills Amendment Procedure and Related Matters Act and these include the Financial and Fiscal Commission, FFC, and the Parliamentary Budget Office, PBO.
Further, written submissions were received from the following individuals and organisations: Mr G Segwela, Mr G Galstone, Fish Hoek Valley Rates Payers and Resident Association, Alternative
Information and Development Centre, Organisation Undoing Tax Abuse, Congress of South African Trade Unions, National Union of Mineworkers, dearSA Online ... [Inaudible.]
During this process, the committee engaged robustly and constructively with various stakeholders. The main objective of these engagements was to ensure that the 2019-20 Special Appropriation Bill process becomes transparent, people-centred and to ensure that the deepening of our democracy continues.
The Bill proposes the following additional financial support for Eskom: An additional R26 billion for the 2019-20 financial year and R30 billion for the 2020-21 financial year. We must, however, note that these amounts, as indicated and expected will be adopted today as a commitment from Treasury, the Minister of Finance, hon Tito Mboweni and his Deputy Minister and the Minister of Public Enterprises, that the money will not be given to Eskom as a lump sum, for example, the R26 billion of 2019-20. There will be a condition that says that Eskom has to make an application and give a motivation for the required amount, and depending on the outcome or approval by the Department of Finance, they will then get the money.
The Bill further provides that the Minister of Finance, in writing, must impose conditions to be met by Eskom before any part of the amounts is transferred and must impose conditions to be met by Eskom after the transfers of any part of the amounts.
We have also had engagements with Eskom and during those engagements, a turnaround plan from Eskom has been presented and engaged by the Joint Committee. There have been critical observations and recommendations made by the committee. Allow me to take this opportunity to present these critical observations and recommendations to this august House.
The Select Committee on Appropriation, having considered the briefings and comments by invited stakeholders on the Bill, recommended as follows.
The Minister of Public Enterprises and Eskom should be conscious of the fact that Eskom cannot rely on government financial support forever, particularly the fiscus. You have heard what the Minister of Finance said yesterday. Provisions of continuous financial support to Eskom directly from the fiscus have the potential to compromise government social programmes for the poor and other development obligations of the Republic of South Africa.
As part of Eskom's turnaround strategy, concrete steps should be taken to strengthen the work of the Chief Restructuring Officer, CRO, including the swift appointment of the qualified and experienced CEO, to turn the financial position of Eskom around, within a reasonable period after the adoption of this report. I think, yesterday, also when the Minister was presenting the MTBPS, he has alluded to how far they are.
The Minister of Finance and the Minister of Public Enterprises should ensure that there is full compliance with all conditions prescribed for Eskom before and after appropriated funds are transferred. Should there be noncompliance, the appropriate consequence management should be instituted expeditiously, which includes the stoppage of funds, and they should report the matter to Parliament within a reasonable time. That is the oversight role that we are committed to play.
Over and above that, Eskom should diversify into other alternative energy- generation sources and not only rely on coal. This will address the matter of low-approved Eskom tariffs by the National Energy Regulator of South Africa, Nersa, by supplementing the tariffs.
Eskom should revive and escalate the implementation of delayed infrastructure repairs maintenance programme ... [Inaudible.] ... due to low or nonavailability of maintenance farms. And all other noncore services should be outsourced. This should be done as soon as possible after the adoption of this report.
The Minister of Public Enterprises should ensure that Eskom urgently take steps to improve the implementation of consequence management regarding the mismanagement of funds and corruption in the entity. A progress report should be submitted within three months after the adoption of the report by the House.
The Department of Public Enterprises and national Treasury should put in place mechanisms and strengthen the oversight capacity to monitor Eskom's operations and expenditure, and jointly provide quarterly reports with the prescribed set of performance indicators to Parliament, so that we can measure the performance.
The Department of Public Enterprises and Eskom boards, in collaboration with national Treasury, the National Prosecuting Authority, the Special Investigation Unit, the Hawks, SAPS, and the State Security Agency should institute in-depth forensic
investigations into the contributing factors of the financial state of Eskom.
A proclamation by his Excellency, President Ramaphosa, on this recommended forensic investigation is critical and may even assist to ensure this recommendation is implemented without delay. This should be done within a reasonable timeframe after the adoption of this report. We mean business.
As I conclude, please allow me to take this opportunity to thank all committee members and support staff for the diligent manner in which they have worked on this Bill. Without your contribution, it would not have been achieved and would not have been possible. For us to get to where we want to be, we are required to work together, no matter what our differences are.
As the ANC, we acknowledge the fact that issues affecting Eskom might not be resolved overnight, but we are certainly committed to play our part to assist government to resolve these problems that we are facing.
The Select Committee on Appropriation, having considered the Special Appropriation Bill, referred to it and classified by the Joint
Tagging Mechanism as a section 77 Bill, reports that it has agreed to the Bill without the proposed amendment. Thank you. [Applause.]
Debate concluded.
Declarations of vote: